Mylan CEO Gets a Raise as Stock Slides Amid Tumultuous Year
Mylan CEO Gets a Raise as Stock Slides Amid Tumultuous Year
(Bloomberg) -- Days before Mylan NV announced an ugly forecast for the year ahead, the generic drugmaker gave its chief executive a raise.
Mylan increased Chief Executive Officer Heather Bresch’s salary by more than 15 percent to $1.5 million and extended her contract through April 21, 2024, according to a document filed with the Securities and Exchange Commission this week. She’s also eligible for a target annual bonus of $2.25 million.
The filing didn’t specify whether she will also receive additional equity awards, which make up the bulk of her compensation. She reaped about $12.7 million in 2017, of which about 70 percent came in restricted shares and stock options.
Following yet another disappointing quarter, Mylan shares dropped the most in three years on Wednesday. The company has grappled with a turbulent generic-drug market, where prices have been falling amid a push by U.S. regulators to get more competing products on the market. North American sales of the allergy treatment EpiPen continue to slide, while Mylan has also incurred costs from manufacturing problems at a major plant in Morgantown, West Virginia.
Mylan didn’t immediately return requests for comment on the compensation.
The sliding stock price hurts Bresch, too. She owns about 856,000 shares in the firm, and most of her equity awards have in recent years been linked to performance targets including return on invested capital and stock return relative to peers.
Mylan’s board launched a strategic review last year to evaluate options for the company. During a call with investors on Tuesday, Bresch said the committee is nearing the end of its review and is “looking at everything and anything that could unlock value."
Bresch’s pay raise, which comes at a seemingly awkward time, is raising eyebrows on Wall Street.
“When there’s a risk of giving out below-consensus earnings guidance, should you be really signing a new employment agreement?” Wells Fargo analyst David Maris said in an interview. “The signing of new contracts is something the market would have liked to have known.”
Maris said investors are looking for a change in management.
“The job of a CEO and a chairman is to well-position the company during challenging industry times. And it doesn’t look like Mylan is in a particularly good position,” he said.
President Rajiv Malik, who faces civil suits accusing him of taking part in an alleged price-fixing scheme, saw his base salary increase 15 percent to $1.15 million and extended his contract to 2022. A lawyer for Malik has previously denied the allegations.
The board also gave similar-sized salary bumps and extensions to Chief Financial Officer Ken Parks and Chief Commercial Officer Anthony Mauro, who now each get $800,000.
To contact the reporters on this story: Riley Griffin in New York at rgriffin42@bloomberg.net;Anders Melin in New York at amelin3@bloomberg.net
To contact the editors responsible for this story: Drew Armstrong at darmstrong17@bloomberg.net, ;Pierre Paulden at ppaulden@bloomberg.net, Mark Schoifet, Timothy Annett
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