Genentech's Levinson May Have No Change-of-Control Agreement in Roche Deal
Genentech CEO Arthur Levinson gets no special benefits for agreeing to sell his company to Roche for $95 a share, according to the company’s most recently filed proxy statement.
That’s a stark contrast to Schering-Plough CEO Fred Hassan, who had specific cash bonuses written into his compensation in the event that he sold the company, netting him a $59 million package, according to the company. (Hassan recently sold Schering to Merck.)
Levinson gets a premium on his shares, of course, which were trading at $70-ish before Roche came looking to take over the company completely. And that will help his options, of which he owns many. Usually, in the event of a takeover, all stock vests immediately. All of Levinson’s option grants are in the money at the deal price, $95.
But here’s what Genentech’s SEC filing says about executive pay in the event of a takeover (it’s on page 32):
We do not currently provide change of control or employment agreements for our [named executive officers].
Levinson’s 2007 agreement (the most recent on file) is relatively modest compared to those of Hassan or Merck’s Richard Clark. He doesn’t get to ride around on a private jet, like Clark and his wife, for instance.
The total value of Levinson’s compensation in 2007 was $18 million, up from $17 million the year before. But almost all of that was in stock and options. Stock and options are subject to vesting schedules and the future value of the stock. In terms of cash, Levinson was paid a basic salary of $995,000 and cash bonuses of $3.1 million.
- BNET’s Previous Roche-Genentech Coverage:
- New Roche Offer and Genentech Squeeze-Out Ploy Put Focus on April’s Avastin Results
- Roche-Genentech: $16 Billion Raised, Raptiva Off the Market, Stock Market Doesn’t Care
- Roche-Genentech: Lack of Deal Is All Goldman Sachs’ Fault
- Roche Goes Hostile in Genentech Bid; Still Has No Financing Lined Up
- Roche Begging for $45 Billion It Doesn’t Have
- Roche-Genentech Deal: $95 Bid Coming by February
- Could Roche-Genentech Deal Price Actually Be Getting Lower?
- Roche Doesn’t Have Enough Money for Genentech Deal
- Roche Genentech Deal Conspicuous By Its Absence
- A Worst-Case Scenario in the Roche-Genentech Deal
Jim Edwards, a former managing editor of Adweek, has covered drug marketing at Brandweek for four years, and is a former Knight-Bagehot fellow at Columbia University's business and journalism schools. Follow him on Twitter or send him an email.
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