Markets

King Pharma Pay Rises 12.3%; CEO Markison Got $100,000 in Personal Jet Rides

By Jim Edwards

Updated on: April 24, 2009 / 10:22 AM EDT / MoneyWatch

Executive pay at King Pharmaceuticals rose 12.3 percent in 2008 even though the company's stock -- with which pay is supposed to be aligned -- stayed flat.

Despite the drama of the AlPharma acquisition, King had a mixed year in 2008, on balance. Revenues were down 26 percent to $1.5 billion and the company posted a net loss of $333 million, primarily due to the cost of the buyout. But cash on hand increased nearly $1 billion. The stock finished pretty much where it started, in the mid $10 range.

The stock performance is important, according to the company:

... the interests of executives should be closely aligned with those of shareholders through equity-based compensation...

But the value of CEO Brian A. Markison's compensation package increased 8.9 percent to $7 million, according to an SEC filing.

He was also given nearly $100,000-worth in personal use of the company aircraft, the filing states. (That's a photo of the King jet, a Dassault Falcon, according to Airliners.net.)

Total compensation for the top five executives at King rose 12.3 percent to $16 million between them. Last year, they shared packages worth about $14 million. Here's the summary table (click to enlarge):

There's some debate as to whether the compensation was a pay rise or not. The AP uses a formula to calculate the value of packages based on the present value of stock and options that have not yet vested or are currently under water, and finds that pay has fallen. BNET prefers to look at the actual totals as expensed by the company, because an option under water today is a jackpot tomorrow. (The idea that an under-water option doesn't count as compensation only makes sense if you would turn such an option down if it were given you by the company. Of course you wouldn't. You'd take it and wait.)

The other big users of the King jet were CFO Joseph Squicciarino, who took $46,000 in jet rides and chief commercial officer Stephen J. Andrzejewski, who received $10,000 in rides.

Here's the company's policy on personal use of the plane:

The Committee has adopted a policy permitting limited personal use of corporate aircraft by the named executive officers and others. Personal use must not conflict with the needs of the company and each use must be specifically approved by the Chief Executive Officer. Personal flights are treated as income to the employee ...