Elan CEO agrees to step down in 2012

Elan CEO Kelly Martin (photo) has a new contract: He'll step down as CEO in 2012 and leave the drugmaker altogether in 2013. The company says it renegotiated a departure date into Martin's contract "to provide clarity and continuity on the executive leadership" at Elan. But what's the rest of the story?

Elan's management has come under fire from its board of directors, particularly the ex-Abbott Laboratories exec Jack Schuler, who even called for Martin's head at one point. Shareholders haven't been too happy either; 28 percent of Elan investors voted against the soon-to-retire Chairman Kyran McLaughlin, who was up for re-election at last month's annual meeting, Reuters reports.

Critics said management spent too much money, particularly on things they considered unnecessary, such as frequent travel by private plane. They added that Elan hadn't done enough to market its key multiple sclerosis drug Tysabri. And so on. But as the Financial Times points out, that investor revolt died down somewhat after Elan underwent a big restructuring and attracted a minority partner in Johnson & Johnson.

The dissatisfaction grew again once certain undisclosed details about that J&J deal surfaced. Most recently, some shareholders have written Elan's board to question the company's plan to spin off its drug-delivery business, the Wall Street Journal reports.

Now that Martin's tenure has a definite end--and McLaughlin is on his way to retirement--will the critics back off? Only time will tell.

- read the Elan release
- see the Reuters story
- get more from the FT
- check out the WSJ coverage

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