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As Genzyme Burned, CEO Took a Salary Increase (and Let His Chauffeur Do the Driving)

Genzyme (GENZ) has been winning its PR battle against billionaire activist investor Carl Icahn recently, but an April 16 proxy filing that shows CEO Henri Termeer taking an 8 percent salary increase may give Icahn some fuel for his case that he should be given more control over the company's board of directors.

The company also added two new directors to its board, keeping the "we're changing for the better!" headlines coming during an absence of news from Icahn. (One of the new directors is Robert Bertolini, former CFO and newly minted gazillionaire from Schering-Plough; the other is Ralph V. Whitworth, who represents Relational Investors.

During boardroom battles, every fault and foible of management may be seized upon by insurgent investors as they demand the votes of shareholders at upcoming annual meetings. Thus, Icahn may want to remind stockholders as they decide whether to vote for his directors' slate that Termeer's salary went from $1.6 million to to $1.7 million last year, despite a series of screwups at its Allston, Mass., facility, that cut drug production there and allowed rival companies to gain a foothold in what was once Genzyme's monopoly on drugs for certain rare genetic disorders.

Termeer's total compensation declined 25 percent from the year before as he gave up nearly $2 million in various cash benefits in his "Non-Equity Incentive Plan Compensation." However, that giveback was tempered by about $4 million in stock and $4 million in options, slightly less but comparable to the value he received the year before. That's crucial because the value of Genzyme's stock will likely remain depressed until its production problems are sorted out. Here's a chart that shows the decline of Genzyme stock last year:

Once the stock rises again, Termeer's pay cut won't look quite so painful. It may even be more than he received the year before.

Termeer's "other compensation" also rose to $124,000 from $116,000. Most of that was spent on a driver who ferries him from his lovely house in Marblehead Harbor, Mass., (pictured) to work. Here are Termeer's recent chauffeur, gas and lease expenses:

  • $81,386 for 2009
  • $73,599 for 2008
  • $66,420 for 2007
Does he need a driver? Everyone knows Boston traffic's a nightmare, but Termeer's house is just 30 miles from Genzyme's Cambridge Mass., HQ, and even less to its Allston factory, which is just outside Boston proper. Couldn't he -- as Genzyme's stockholders saw their investments plunge -- have driven himself?


Image by Flickr user nordique, CC.