Activist shareholder Ib Sonderby has fired off another missive to Elan's board, decrying the 25 percent salary increase granted to its oft-criticized CEO Kelly Martin (photo).
Martin's base salary rose to $1 million as of June 1, a 25 percent increase. What's more, he collected an $800,000 bonus for 2009 after waiving his 2008 bonus because of Elan's stock woes. The company's shares haven't exactly been great performers lately; as Bloomberg notes, the stock has dropped by 15 percent since the beginning of 2009. And the company reported a wider net loss for Q2 because of a $206 million settlement of a U.S. investigation into its marketing of the epilepsy drug Zonegran.
Sonderby says he has conducted an analysis and it "revealed that Elan was in the lowest percentile on performance over a two and three year basis, while the rate of compensation increase was in the top percentile," he maintains in his letter. "This massive disconnect between pay and performance suggests that the compensation committee failed to perform this analysis."
Sonderby complained to Elan's board last month about its oversight of Martin and pledged to "restore good governance" to the company. However, "Mr. Sonderby has never shown any real interest in a dialogue with the company," Elan spokesperson Paul McSharry tells Bloomberg.