August 19, 2016
By Mark Terry, BioSpace.com Breaking News Staff
A golden parachute is a large payment given to an executive who loses his or her job if the company they run merges or gets bought. Noting that Marissa Mayer, the chief executive officer of Yahoo!, will receive $54.89 million if she leaves the company after its acquisition by Verizon, Bloomberg evaluated the twenty largest golden parachutes they know about. At least three of them are life science companies. Take a look.
John Hammergren, chief executive officer of McKesson , is actually number three on Bloomberg’s list. The size of his golden parachute, should McKesson toss him out of the plane for some reason, is a whopping $198,150,788. The company, headquartered in San Francisco, is a drug distributor, as well as provider of health information technology, medical supplies, and care management tools.
McKesson’s revenue in 2015 was $179 billion, so that $198.2 million doesn’t seem too extravagant in comparison, although that’s not the only factor to take into consideration. And in comparison to some companies, where their chief executive’s activities haven’t really accomplished what they are tasked to do, Hammergren seems to be fairly successful.
In this year’s first quarter results, revenues were up 5 percent year-over-year to $79.7 billion, and the first-quarter GAAP earnings per diluted share from continuing operations were up 15 percent year-over-year to $2.88.
Over the last five years, McKesson has been on a mostly steady climb, at least into 2015. Shares traded on Jan. 13, 2012 for $77.24, then made a steady climb to a high of $240.61 on May 22, 2015. They then dropped to $154.03 on Feb. 12, 2016, but have been recovering, currently trading for $193.87.
Allergan ’s Brent Saunders has a golden parachute of $140,672,343. Had the Pfizer acquisition gone through, Saunders was going to become president and chief operating officer of the newly formed Pfizer plc.
Allergan’s second-quarter reporting on Aug. 8 indicated total net revenues of $3.7 billion, a two percent increase over the 2015 second quarter. It’s probably a little bit difficult to evaluate Allergan over a five-year period simply because due to numerous mergers and acquisitions, it’s not really the same company now as it was five years ago. But on Jan. 3, 2014, shares traded for $168.02, spiked to $331.15 on July 31, 2015, then dropped back to $201.65 on May 16, 2016. Shares are currently trading for $253.35.
The third biopharma company on the list is Regeneron Pharmaceuticals ’ Leonard Schleifer. Should he get the boot for some reason, his golden parachute is $90,277,657. At the company’s recent second-quarter report, the company showed a 21 percent increase in total revenues in the quarter compared to the previous year, going from $999 million in the second quarter 2015 to $1.213 billion in this year’s quarter.
Regeneron , until fairly recently, has been on a big long-term climb. Shares traded for $132.17 on May 25, 2012, climbed steadily to $579.57 on Nov. 20, 2015, then dropped down to $339.48 on June 24, 2016. Shares are currently trading for $408.70.
