Fred Hassan: $134K On Personal Safety
5 CommentsBy Ed Silverman // April 21st, 2007 // 9:48 am
That’s what Schering-Plough spends to keep its chief executive safe from the vagaries of the world, according to the drugmaker’s proxy. However, there’s no detail on exactly what that money buys. Almost another $5,000 was spent on Fred’s home-security system. Flip to page 39.
No other Schering-Plough exec received personal security, although Tom Koestler, the exec vp who heads the research operation, did get a home alarm worth nearly $10,000, while general counsel Tom Sabatino’s home security cost the company nearly $5,000. These fellas must have an awful lot of doors and windows. And plugged their chimneys real tight, too.
In response to a question about all this, a Schering-Plough spokesman wrote Pharmlot to say this: “The security systems and protections provided to the ceo and other executives are considered by the compensation committee of the board to be both necessary and prudent given the current world environment.”
However, he did not address a specific question about whether Hassan received any death threats.
In any event, Fred’s his total compensation package last year was worth $29.7 million. He received a $4.2 million annual bonus, compared with $3.7 million for 2005, and a $1.65 million salary, up from $1.56 million in 2005.
Then there was $8.6 million from a long-term incentive plan, deferred stock worth $4.2 million, long-term performance units valued at $2.1 million, shares from a performance-based ‘transformational program’ pegged at $3.9 million and a $1.5 million increase in the value of his pension.
Finally, there was another $633,000 in other compensation. This included $266,400 in company contributions to savings plans, $142,000 for using the corporate jet and chopper, and $83,600 for executive life insurance, plus the securitye stuff.
Here’s the proxy.[tags]Executive Pay, Fred Hassan, Schering-Plough[/tags]
Dr. Safety
Thought you might enjoy: http://safetywithinpharma.blogspot.com/
roccaas
I’m always surprised when anyone who has money invested in the market is “shocked” at the $$ spent on Executive security/convenience. As an investor (or employee; I’ve worked for Fred Hassan, Bill Weldon, Kevin Shearer and others), I want those guys working. I want a professional driver picking them up from the house for the ride to work so the Exec. can WORK. I want them on Corporate Jets/Choppers getting someplace and WORKING. Time is the ONLY resouce of which these companies will never have enough! The hourly “billing rate” on a top exec is very high, they don’t need to be sitting in traffic and unable to move their business forward. I also want them and their families safe. They need security; for their piece of mind, their value to the company, and the continuation of the business plan. Security/convenience is a cheap investment when you consider the alternatives: kidnapping (exec or family), accidents and the shock to the system, and efficient work investment during what for the rest of us drones is down time like traffic, security checkpoints, etc.
Thanks
ed
Hi Roccaas,
Thanks for writing. And I posted this item simply because the amount of money spent is significant. That doesn’t mean to imply it shouldn’t be spent, but it is worth noting.
As far as the home security systems, I do believe these execs are compensated sufficiently so as to be able to pay for their own home security systems. They can also consult with their accountants about the possibility of deducting such an expense, but why should shareholders pay for that?
Regards
ed
Anonymous
As the entry posted just a few entries after this one indicates (Glaxo & HLS), pharma companies have to deal with animal rights extremists etc harassing their employees at every turn. I’ve been targeted by such lunatics, and I can say without reservation that a home security system is very much a business-driven expense that the company should reimburse when their folks are threatened.
ed
Dear Anonymous,
I appreciate that point. But we’re talking about executives who, often, live in large homes, which require more expense than the average size house when it comes to installation and monitoring costs.
Given that they are high-ranking execs, often with families, would they not have security systems otherwise?
And given that they earn as much as they do, I simply maintain they should pay for home security alarm systems thelmselves.
Many of these executives have to wear more suits and make more trips to the cleaners than others. Yet the employer isn’t expected to pay for that outlay of money, even though it’s very much work related.
I’m not trying to equate dry cleaning with personal security other than to say both are necessary items in day to day life. I never wrote that the need for such systems - whatever the reason - was unjustified or misplaced. I’m simply pointing out that these execs can afford to cover that cost themselves.
Thanks for writing
Ed