|Hospira CEO F. Michael Ball|
Hospira's ($HSP) board has stuck with F. Michael Ball as he has steered the company through a tough regulatory patch in which it had to invest hundreds of millions of dollars to upgrade its plants. For his efforts, Ball last year came out further ahead than in 2012, although not nearly as well as the year he was hired.
Ball's compensation in 2013 totaled nearly $9.89 million, $1.1 million ahead of his 2012 compensation of $8.78 million, according to a filing with the Securities and Exchange Commission (SEC). But it is still 20% less than his total package added up to in 2011, the year he was hired away from Allergan ($AGN) to become Hospira's top exec. The big difference that year was in the value of a stock award, which the filing shows was valued at $8.96 million compared a stock award valued at $4.87 million last year.
The boost in the final figure last year was in large part due to nearly $2 million in non-equity incentive Ball received. According to Hospira, that category includes $500,000 for each of 5 performance goals he hits before Dec. 31, 2014. Hospira says Ball achieved one of those in 2013.
While Hospira's earnings continued to be hampered last year by its on-going regulatory issues, it reported improvements in its earnings release in February. A big stride on the regulatory front was that the FDA had given the company verbal assurances that its plants at Rocky Mount, NC, and Austin, TX, have achieved the status of voluntary action indicated (VAI), a step down from the official action indicated moniker they have been operating under. He said Hospira expects the FDA will return for reinspections around midyear. "The warning letter for Rocky Mount cannot be lifted until the site has a successful reinspection, and Austin will have a reinspection as well, but we believe the change to VAI status for both of these plants' pharma operations is an acknowledgement of the progress we have made," Ball said.
Problems at the Rocky Mount plant were first noted in a warning letter in 2010. Since then, the company launched a major overhaul of its U.S. manufacturing network including plants in Clayton, NC, and Boulder, CO, in addition to the Austin and Rocky Mount facilities. It has invested more than $375 million, brought in consultants and added to its quality-control management, but still struggled with recalls and FDA concerns. Last year, the company received a warning letter for a plant in India as well. Some of its medical device operations have also run afoul of the FDA.
But Ball has helped the company make steady progress and as improvements have been made, the drugmaker has been able to ramp up production from its U.S. plants. It's building and buying facilities in India that it expects will improve its ingredients cost structure, so as to help it improve margins going forward.
- here's the SEC filing