Elan top brass will get mega new bonus scheme
ELAN boss Kelly Martin and top insiders at the drug company may be in line for a mega bonus pot -- potentially worth hundreds of millions -- after shareholders approved a new long-term incentive plan for the top brass last week.
Under the new scheme, up to 30m shares will be made available for the long-term incentive plan. This could be worth upwards of €105m, depending on share price performance, based on the likely award structure.
Elan has traditionally granted less than 1 per cent of its share capital each year to staff under incentive schemes. Some 4.4 per cent of the company's share capital is outstanding under Elan's last LTIP.
The new scheme will bring the total amount potentially available up to 9.7 per cent of the company. Observers suggest that this compares favourably with other pharma firms, some of which have allocated as much as 20 per cent of their share capital to staff.
'We have been very conscious of shareholder equity dilution and have worked to manage this in recent years through the careful use of equity programmes. We have on average given equity awards (at-the-money options and restricted stock units) representing less than 1 per cent annually of our issued share capital,' an Elan spokeswoman added.
Elan is traditionally one of the bigger payers on the Irish market as it seeks to retain key staff in the highly competitive market. Elan's share price doubled last year as its debt problems were resolved and its drug development pipeline started to look even more attractive to investors.
Last week, Elan chairman Bob Ingram suggested they could become a takeover target if its new Alzheimer's drug works out. "It's certainly possible and we have had discussion with the board about that. If an offer comes in, we can't ignore it -- but it's not our strategy to sell the company."
Sunday Indo Business