BMS Execs Get Cash Not to Ride Private Jets; 61% Pay Raise to $59 Million
Bristol-Myers Squibb employees: Have you ever been made late by a meeting that ran a bit too long? If so, the company will provide you with a private jet to get you to your next appointment on time.
At least, that was the perk given to R&D president Elliott Sigal, according to BMS's 2008 proxy statement filed with the SEC:
Due to his need to stay at a business meeting which ran longer than planned, Dr. Sigal was permitted to use corporate aircraft to make a connecting flight for personal reasons.Sigal and BMS's other top executives did very well in 2008, even if you take out the private jet rides (the BMS fleet is pictured). Their total compensation increased 61 percent to $59.6 million, up from $37.2 million in 2007.
CEO Jim Cornelius got total compensation of $25 million, more than double his $11.3 million the year before. Why? The company met its performance targets and Cornelius's options vested because he's now 65, the company said. Here's who got what:
- Name, 2008 pay, 2007 pay
- CEO James M. Cornelius, $25,037,769 ... $11,311,922
- CFO Jean-Marc Huet, $3,944,556 ... NA
- COO Lamberto Andreotti, $10,755,298 ... $8,744,149
- R&D president Elliott Sigal, $9,643,490 ... $8,393,962
- President U.S. Anthony C. Hooper, $6,047,495 ... $3,757,768
- ex-CFO Andrew R. J. Bonfield, $4,240,669 ... $4,958,734
- Source: SEC, numbers are rounded
But it wasn't all good news. As BMS's own proxy shows, if you invested $100 in BMS stock back in 2003, that stake at the end of 2008 was worth ... $101. So Cornelius et al take their rewards just for having the stock tread water. (Given the market collapse, BMS holders will be grateful for small mercies.)
BMS also laid off 8,000 workers. Did management make any sacrifices in solidarity? Um, kinda-sorta:
... we eliminated executive perquisites for our Management Council members, including our Named Executive Officers, including personal air travel on company aircraft, company cars, annual physical exams, financial counseling and tax preparation pertaining to tax returns for the 2008 calendar year and later.OK, so the gilded cage will feature fewer company-paid visits to the opera and skyboxes at Yankee Stadium. But if you continue reading, the sacrifice didn't exactly hurt:We also discontinued the purchase of season tickets to cultural and sporting events that were occasionally made available to senior executives.
... on January 1, 2008, Dr. Sigal and Messrs. Andreotti, Hooper and Bonfield received base salary increases ranging from 2.0% to 3.5% to partially offset the elimination of these perquisites.Put another way: If you assume that Andreotti received only 2 percent extra to compensate him for lost perks, at the very minimum he was receiving $22,000 a year for travel, tax prep and "sporting events."
The executives' wives flew for free, too:
In addition, we permitted personal travel on company aircraft for family members (subject to seat availability) when accompanying an executive who was on business.The proxy makes the argument that Cornelius is in some way a prisoner of his success:
In 2008, Mr. Cornelius was required to use non-commercial aircraft for air travel and was provided a security car and driver for ground transportation for security reasons.Required?
An independent security study determined that because Mr. Cornelius serves as our CEO, there is a concern that individuals or groups may target him as the personification of our company. These individuals and groups may include criminal groups and militant activists whose motivation can be monetary gain or publicity for their cause.BMS's fleet of aircraft (here's a video of the helicopter) are now up for sale. Buy them as a set -- they have matching paint-jobs, according to CityFile.... Mr. Cornelius entered into an aircraft time sharing agreement with the company that enabled him to reimburse us for his personal use of company aircraft. During 2008, Mr. Cornelius reimbursed us $47,715.70, which represented all expenses relating to his personal air travel using company aircraft.