$60M goodbye for Schering's Hassan?

When we heard yesterday that Schering-Plough CEO Fred Hassan (photo) would be moving on after his merger with Merck is done, we asked ourselves the obvious follow-up question: how big is his golden parachute? Well, according to a couple of intrepid bloggers, the answer is, about $60 million. Plus--drum roll, please--an additional $3.4 million in "phantom stock" Schering granted to Hassan at the end of last month.

First, let's look at the $60 million. (Thanks to Jim Edwards at BNet Pharma for the very detailed breakdown.) The change-in-control package was valued at just over $59 million as of last April, when the most recent proxy statement was filed with the SEC. But its value at the time was partly dependent on Schering's stock price as of Dec. 31, 2007, which was over $26. As we speak, SGP is trading at around $21. So the stock portion of the package would be devalued accordingly--unless it was revised for 2009, which very well may be. The proxy statement isn't available yet, so we don't know.

Now, the phantom stock. As reported at the Shearlings Got Plowed Blog, Hassan disclosed to the SEC last week that he'd been granted the equivalent of 195,610 common shares. But this phantom stock converts to cash "following the reporting person's termination of service," the SEC document states. So Hassan will get an additional $3.4 million, cash, added to his current parachute.

Hassan's not alone in his glistening change-in-control payout. Executive VP Carrie Cox is set to get $22.8 million on a change in control, and an additional $900,000 if she's terminated afterward, In Vivo reports. CFO Bob Bertolini gets $19 million on the deal and $27.5 million if the new company gives him the boot. Plus, both of them--and another three of Schering's top six execs--got an additional phantom stock award just like Hassan's, only about a third as rich: $1 million to $1.2 million. Now that's quite a going-away present.

- get the analysis from BNet
- see Hassan's SEC document
- read the post at Shearlings
- check out the In Vivo article

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