Pfizer's Interest in Enzon May Create Jackpot Payday for CEO Buchalter
When Enzon (ENZN) became the focus of DellaCamera Capital's anger last summer, the investment group had four demands:
It wanted its money back (in the sense that the stock it owned traded at $16 in 2004 but was worth only $7-and-change by 2009).- It wanted the company's specialty pharma decision sold off.
- It wanted its own people on the board.
- And it wanted Enzon CEO and chairman Jeffrey H. Buchalter (pictured) fired, along with his excessive compensation of around $5 million a year for running a company that clocks less than $200 million a year in revenues.
The fourth box may be about to be checked if rumors of Pfizer (PFE)'s interest in acquiring the company are true.
But rather than punish Buchalter -- the company has only really made progress since adult supervision arrived, in the form of directors appointed by DellaCamera and Carl Icahn -- the Pfizer scenario would actually reward Buchalter. According to page 17 of this SEC filing, if Buchalter is terminated following a change of control, he gets:
- a cash payment equal to any unpaid base salary through the date of termination.
- any earned bonus relating to the preceding fiscal year that remains unpaid.
- a lump sum cash payment equal to three times the sum of his annual base salary and target annual cash bonus/
- a pro rata portion of his target bonus for the period worked during the fiscal year in which the termination occurs.
- all equity awards granted to Mr. Buchalter that have not vested immediately prior to the effective date of the change of control will vest at such time.
- a gross up that will compensate him for having to pay taxes on the above.
- health benefits, life and disability insurance paid for him and his family for the next six years.