St. Jude Medical Investors Warily OK Tax Breaks for Senior Execs When Abbott Deal is Completed
Shareholders in St. Jude Medical (NYSE:STJ), who this week voted to approve its pending, $25 billion merger with Abbott (NYSE:ABT), grudgingly approved a measure to give tax breaks to its senior executives if the deal goes through.
Little Canada, Minn.-based St. Jude’s board last year voted to do away with a “gross-up” provision that would have covered the 15% excise tax imposed by U.S. tax laws on stock owned by executives and directors for the 6 months before and after a merger transaction.
But after inking an $85-per-share deal in April to be acquired by Abbott, St. Jude moved to reinstate the gross-up provision, which could relieve CEO Michael Rousseau and other executives of $18 million in tax payments if they leave Abbott after the deal closes, expected by year-end.
Little Canada, Minn.-based St. Jude’s board last year voted to do away with a “gross-up” provision that would have covered the 15% excise tax imposed by U.S. tax laws on stock owned by executives and directors for the 6 months before and after a merger transaction.
But after inking an $85-per-share deal in April to be acquired by Abbott, St. Jude moved to reinstate the gross-up provision, which could relieve CEO Michael Rousseau and other executives of $18 million in tax payments if they leave Abbott after the deal closes, expected by year-end.