Actavis execs up for $101M in merger-related bonuses, if investors approve

Actavis CEO Brent Saunders

Through a storm of M&A activity, Actavis ($ACT) CEO Brent Saunders has climbed his way up into the CEO's chair at one of pharma's top 10 drugmakers--and it's a climb for which he's been well rewarded. Lucky for his colleagues at the top of Actavis, that M&A could pay off in a big way for them, too.

After winning $13.2 million at the helm of Forest Labs for fiscal 2014, Saunders helped engineer a sale of the company to Actavis. And then, he took up the reins at the combined company, garnering $36.6 million in cash, equity and options last year, according to Actavis' proxy filing.

While Saunders' $500,000 base salary at Actavis is actually lower than the $595,000 he earned at Forest for 2014, he more than made up for it with $25.9 million in stock awards, $8.6 million in option awards, $1.5 million in incentive pay, and more than $55,000 in other perks.

If shareholders approve, Saunders and the rest of the Actavis management team will be in line for special performance awards related to the Actavis-Forest merger and the company's subsequent Allergan buyout. According to the proxy, these cash-based bonuses could be worth a pretty penny.

Saunders' "merger success award" from the Forest deal could be worth as much as $30 million down the road, depending upon how Saunders and Actavis measure up against long-term goals. Chairman Paul Bisaro is in line for as much as $21 million, performance allowing. Five other Actavis execs could nab as much as $10 million apiece, the company's proxy states.

An additional "transformation incentive award" is tied to the Allergan buyout. Both of these special handouts--to be paid in cash or stock when the time comes--are up for shareholder approval at the company's annual meeting June 5.

Plus, Saunders' $36 million in 2014 compensation is just what he made from Actavis between July 1 and December 31 of last year, according to the proxy. Add that to the $3.3 million first-quarter haul from Forest, whose fiscal year ended March 31, and he racked up at least $40 million over three quarters. Numbers for April through June aren't available.

Now, after shelling out $66 billion to buy Allergan last month, it's up to Saunders to prove his worth, and all eyes will be on the company as it attempts to blaze a new trail. The newly combined company sees itself as a "growth pharma," which, according to Saunders, means boasting Big Pharma's size and scope--but not its tiny growth rates. To do that, he's planning to create a "nimble, fast-paced environment," including keeping a flat structure, fostering individual accountability, and making sure news--both good and bad--travels quickly, he told FiercePharma earlier this year.

Meanwhile, Saunders isn't the only Actavis leader in line for a hefty payout. Executive Chairman Paul Bisaro grabbed $35.9 million of his own last year, including $25.6 million in stock awards and $6.4 million in options. And his "merger success award" is worth up to $15.5 million more.

- check out Forest's SEC filing
- and Actavis' SEC filing

Special Report: Pharma's top 10 M&A deals of 2014 - Actavis/Allergan - Actavis/Forest Laboratories

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