Tuesday, November 30, 2004

Paruchutes for Pharma Execs

In a federal filing released Monday, Merck announced a bloated severance package for its top executives should another company starts a takeover of the big New Jersey drugmaker.The company's value has fallen 40 percent since September when it pulled its blockbuster arthritis treatment Vioxx from the market over health concerns. The New York Times reported that the record-high level of the euro against the dollar has made the $61 billion company a bit ancy about a European pharmaceutical company launching a hostile takeover bid. To encourage its top 230 managers to stay during what is expected to be months of shaky times, the board provided for a one-time payment of up to three years of salary and bonus if another company bought over 20 percent of Merck's shares. Mark M. Reilly of Compensation Consulting Consortium of Chicago beleives this could cost Merck up to $69 million. Ya, like this should help shareholders.

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