You do realize that by proactively responding to posts on this and so many other boards on the internet that you have robbed SP of the ability of filing future 10-Q statements regarding the disclosure of information which may already be rumored in this new public domain. We are all aware of the fact that internally, SP has scoured the internet to try to keep up with the word on the street, so much so that many execs are rumored to have hissy fits (nice put) over their characterizations and the dissemination of “company secrets.” Sorry, you can’t stick your head back in that hole. (The air is probably fresher out here anyway!!!)

As I stated earlier, SP is notorious for its spin-doctoring, using that which it finds useful and ignoring more salient, nay damning, evidence.

How is this “earning trust every day”.

Will this House of Cards tumble?

Ellis Taylor

– condor

This just seems like typical corporate spin-doctoring, the type we at OBS have heard since the takeover was announced.

Do you understand The Butterfly Effect? When the fruit of a simple transgression manifests itself in such far flung ways, people have a right to be annoyed. The initial projections for ENHANCE were for it to be presented at the 2006 AHA. As such, I feel that FORBES (and all other comers) are entitled to back date their projections of Vytorin/Zetia sales which directly affected executive bonuses and finally, SGP’s ability to leverage the OBS deal.

Although FH talks a good game, I see too many skeletons in the closet of the current SGP leadership (Genotropin, fen-phen) balanced against but one shining moment (Pfizer’s purchase of Pharmacia, which is probably more attributable to their lack of pipeline and desire to control Celebrex, just a bit of luck). When you control these events versus the performace of the companies he controlled at the time versus the market it general, FH does not look like the 5-tool superstar you assert, but more of a trading deadline pick-up that sparks a borderline play-off team to a short-lived run towards also ran status.

He talks about trust. There is no more in Schering-Plough. He talks about integrity. He and Schering-Plough are believed not to have any. His reputation? Out the window! He can scratch and claw all he wants to. He can send his hired guns after the big, bad media, but to no avail. Who cares if he and his board were re-affirmed at the stockholders meeting? So were a lot of other embattled CEOs in the past. This result means little. What means more is that after some questionable events at AHP and Pharmacia, there is now one that will dog him for a long, long time!

Thanks for the note. And I appreciate your many points. A couple of observations, though. The guys at Forbes wrote that Kastelein believes that, if he had full control of the study, the results could have been released in March 2007, although you only mention 2006. Can you please clarify?

Also, I’m curious to know why the May 1 options grant wasn’t priced higher. This topic was already addressed on Pharmalot but you didn’t respond to it then and you whizzed right by it in your reply this morning. Can you address that now? Here’s the link to our previous post…

http://www.pharmalot.com/2008/05/fred-hassan-in-graceland-lots-of-cheap-options/

Thanks for writing in,
ed

The innuendo of this article on the character of our CEO is very unfair.

Fred Hassan has a distinguished track record as a CEO who is virtually synonymous with integrity. We see this in his actions every day.

Fred Hassan also has a proven track record as a CEO who has taken a series of some of the biggest challenges in the world of business and turned them around to the benefit of patients, shareowners and society.

Schering-Plough proved to be the toughest challenge of Fred’s career, and he and his management team succeeded against long odds in transforming our company — including important corporate governance and compliance actions to build business integrity into the DNA of the company and to align management incentives with the interests of shareholders.

When Fred joined us in 2003, when our company was in dire straits, he voluntarily gave up his bonus of up to $2 million. Since then, Fred has invested very large amounts of his own personal assets into Schering-Plough - first buying $4.6 million of Schering-Plough stock soon after he took over as CEO: then again buying another $2 million in company stock in April of this year.

For this article to now invent a $13 million ‘giveback’ is at odds with good corporate governance and with Fred’s record. It is not accurate or fair. It is based on hypotheses and speculation that are not warranted by the facts.

One of the most serious fallacies of the article is to assume that the Merck/Schering-Plough ENHANCE clinical trial could have been presented at the American Heart Association Conference (AHA) in 2006. In fact, as the independent lead investigator for that trial stated at a public press conference in March 2008 – which Forbes editor and writer on the story, Matt Herper, attended – the complete data could not have been available in 2006. So by any calculation it would have been impossible to present the findings of the trial at the 2006 AHA meeting.

Another serious fallacy in the article is that it speculates on what 2006 and 2007 performance might have been if a clinical trial had been completed earlier — based only on performance in a few months of 2008.

Further, the writers appear to have ignored the fact that the incentives at issue were based on hard performance metrics – sales, earnings from operations and total shareholder return. Performance against these metrics was certified by accountants for the Compensation Committee of the Board. Market capitalization, which the writers focus upon, was not a performance metric for any incentive plan since Fred joined Schering-Plough.

The suggestion that compensation should be voluntarily forfeited, based only on a reporter’s speculation, is inconsistent with good corporate governance processes. It also ignores the fact that this CEO has already put his money where his mouth is — investing more than $6 million of his own assets in our company.

Meantime, we are pleased by the strong show of support by our shareholders for the re-election of the Board - including Fred Hassan and for each member of the Compensation Committee - in the vote received for the Annual Meeting of Shareholders on Friday, May 16. At that meeting, each Director was re-elected by at least 93% of the shares voting.

We are proud to have Fred Hassan as our CEO.

Susan Ellen Wolf
Corporate Secretary,
Vice President - Governance
And Associate General Counsel