Why is Allergan Giving Free Houses and Private School Fees to Its Bosses?
By Jim Edwards | February 15, 2011
Allergan (AGN) CEO David Pyott received a modest 5.5 percent compensation raise to $12.6 million in 2010, even though his company’s revenues rose nine percent to $4.9 billion and its stock went up by a similar proportion. Pyott also put an expensive Department of Justice investigation behind the company and secured yet another FDA approval for Botox, this time for migraines. Here’s the summary (click to enlarge):
Normally, investors and employees ought to cheer Allergan’s restraint. At other companies, Pyott’s pay packet would have ballooned like the Natrelle breast implants it sells.
But the footnotes on page 71 of the SEC disclosure reveal that a couple of Pyott’s senior management team have generous compensation arrangements:
* EVP/president Europe, Africa, and the Middle East Douglas S. Ingram received $277,570 towards the cost of his house and a private education for his children. The company said they were “relocation allowances.” It did not explain why Allergan was paying for his children’s education — it doesn’t pay for anyone else’s — or why Ingram was unable to find a decent public school on any of those three continents.
* Similarly, R&D chief Scott M. Whitcup received an interest free home “loan” for $300,000 that will be forgiven in its entirety by the end of this year. In other words, Allergan paid for his house.
The perquisites stick out like sore thumbs in Allergan’s compensation summary, because the company — admirably — ended all its executive perks in 2007, replacing them with flat cash payments of $20,000 for Pyott and less for his underlings. The company says it has a philosophy of providing “modest” perquisites. These aren’t they.
By Jim Edwards | February 15, 2011
Allergan (AGN) CEO David Pyott received a modest 5.5 percent compensation raise to $12.6 million in 2010, even though his company’s revenues rose nine percent to $4.9 billion and its stock went up by a similar proportion. Pyott also put an expensive Department of Justice investigation behind the company and secured yet another FDA approval for Botox, this time for migraines. Here’s the summary (click to enlarge):
Normally, investors and employees ought to cheer Allergan’s restraint. At other companies, Pyott’s pay packet would have ballooned like the Natrelle breast implants it sells.
But the footnotes on page 71 of the SEC disclosure reveal that a couple of Pyott’s senior management team have generous compensation arrangements:
* EVP/president Europe, Africa, and the Middle East Douglas S. Ingram received $277,570 towards the cost of his house and a private education for his children. The company said they were “relocation allowances.” It did not explain why Allergan was paying for his children’s education — it doesn’t pay for anyone else’s — or why Ingram was unable to find a decent public school on any of those three continents.
* Similarly, R&D chief Scott M. Whitcup received an interest free home “loan” for $300,000 that will be forgiven in its entirety by the end of this year. In other words, Allergan paid for his house.
The perquisites stick out like sore thumbs in Allergan’s compensation summary, because the company — admirably — ended all its executive perks in 2007, replacing them with flat cash payments of $20,000 for Pyott and less for his underlings. The company says it has a philosophy of providing “modest” perquisites. These aren’t they.