Forest Labs (FRX) reported that CEO Howard Solomon earned $8.9 million in fiscal 2011, 7 percent more than last year, and dropped another hint that the company is preparing his exit. Solomon's son, David, was listed as a "named executive officer" for the first time. He earned $2.7 million in total compensation as the svp/corporate development and strategic planning.
The company also spent $316,638 on medical expenses for the 83-year-old CEO, up from $56,571 in 2010. The company's proxy disclosure did not say what was wrong with Solomon. UPDATE: A spokesperson for the company said:
Mr. Solomon is in excellent health and has no ongoing medical conditions that would impair his ability to continue functioning as the Company's CEO. A good portion of last year's expense was related to hip replacement following a fall when he was playing tennis â€" which he has now reluctantly discontinued.Solomon's health is a crucial issue for Forest. A CEO's medical condition can sometimes count as a material event that requires disclosure to the SEC. The CEO is fighting to retain his place atop the company against both investor Carl Icahn, who wants his own directors on Forest's board, and the Department of Health & Human Services, which wants to exclude Solomon from the drug business as a punishment for the company settling a $313 million investigation by the Department of Justice over its illegal marketing of Levothroid and other drugs.
The company said in April it might consider Solomon stepping aside "temporarily" while his litigation against the HHS was ongoing. But Solomon's advanced age, his high medical bills, the fight with Icahn and the litigation all suggest his tenure may be coming to an end sooner rather than later.
50 years at Forest
That end will be a culture shock at Forest, as Reuters noted:
Losing any measure of control would be notable for Solomon. Though virtually invisible to Wall Street -- he tends not to speak on earnings calls or at investor conferences; one analyst recalls meeting him just once in 17 years -- Solomon is deeply identified with the company he has run since 1977.His 34-year run as CEO is merely the half of it. Solomon has been a director of the company since 1964 -- nearly 50 years. (He's not the oldest member of Forest's management; Reuters added that 84-year-old William Candee has served as a director since 1959.)
Here's how Solomon's medical bills have increased over the last few years.
- Embattled Forest Labs Gives First Hint Its 83-Year-Old CEO Could Step Down
- Carl Icahn vs. Forest Labs: CEO Took $300M While Stock Fell