Genentech aims to keep staff with $371M

Genentech is acutely aware that Roche's takeover bid could send its prized staff scurrying. So it's spending up to $371 million on retention bonuses to keep those folks in place. "Virtually all" of its 10,700 employees will get cash to stick around, though there are no details yet on just how the money will be apportioned--apart from the news that CEO Arthur Levinson would get a whopping $8.7 million.

As you know, Roche offered $89 a share for the 44 percent of Genentech it doesn't already own. A special directors' committee rejected the offer, but said it would entertain a higher bid. Analysts expect Roche to come back with a sweetened offer, perhaps around $110 a share.

But of the assets Roche wants to acquire, human capital is among the most important. Genentech is well known for its innovative culture and scientific expertise. And as we reported yesterday, as Roche's bid rises, the payout for Genentech employees rises, too, offering incentive to retire early or strike out with new startups. The bonuses are an attempt to counteract that. They'll be paid whether the merger happens or not, and they'll take the place of 2008 options grants. As a Genentech spokesperson noted, cold hard cash is probably a better incentive to stay than new, unvested options would be.

- read the story in the New York Times
- see the San Jose Mercury-News article

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