Sector News

Medivation CEO set for $350M payoff when Pfizer closes its $14B buy

August 31, 2016
Life sciences

When Medivation bidders were circling, CEO David Hung fought hard for a higher price for the company’s shareholders. And he was one of them–a big one, as a new securities filing shows.

Hung stands to collect more than $300 million when Pfizer closes on its $14 billion deal for Medivation, thanks to his years of accumulated stock, options, incentive-plan shares and the like.

As of Aug. 18, Hung held 2.84 million stock options, vested and unvested, worth $182 million in the Medivation sale. He owned 1.45 million shares outright, worth another $118.6 million. His incentive-plan share units amounted to 171,528, for a cash value of almost $14 million.

Then there are Hung’s stock appreciation rights, which, like options, benefit executives when share prices rise. They’re worth $37 million.

His cash severance is peanuts, comparatively–24 months of base salary, or about $1.82 million, according to the company’s securities filing, plus an estimated performance bonus of more than $868,000.

Grand total: About $354 million.

That’s a nice payoff for Hung, who co-founded Medivation in 2003 and spent 13 years building it into a company that could sell for $14 billion. Enough to retire to a private island somewhere, or, more likely, start up another biotech venture.

In the realm of biopharma payouts, it’s hefty. Henri Termeer, who was CEO of Genzyme when Sanofi snapped up his company for $20 billion, bowed out with $158 million in payment for stock, options, performance units and severance benefits.

But if you want to get technical about it, the “golden parachute” part of Hung’s figure is $35.6 million. That amount includes the cash severance and bonus, plus the payoff from unvested options and performance shares, as well as the value of continued health insurance benefits.

Here’s how some other exits compare: David Pyott, CEO of Allergan till Actavis bought the company and assumed its name, was in line for a $100 million goodbye payment along the same lines. Currently Allergan CEO Brent Saunders boasts a $140 million parachute, per Bloomberg’s recent calculations. The cash portion of his severance amounts to $12.2 million alone.

And according to FiercePharma research, Wyeth CEO Bernard Poussot, who also sold his company to Pfizer, exited with $53 million. Schering-Plough’s Fred Hassan, CEO when Merck & Co. pulled off their merger, left with almost $50 million; Schering even covered related taxes, to the tune of $11.7 million.

By Tracy Staton

Source: Fierce Pharma

comments closed

Related News

February 4, 2023

MedTrace receives U.S. patent for diagnosing the human heart

Life sciences

The U.S. Patent and Trademark Office issued a patent to MedTrace for their method of diagnosing the human heart via 15O-water PET. The patented method is the foundation of the company’s software aQuant, currently under development. Hendrik “Hans” Harms, PhD and Senior Scientist at MedTrace, and Jens Soerensen, Professor and Clinical Advisor to MedTrace, are the originators of the method.

February 4, 2023

Roche taps insider Teresa Graham for top pharma job as setbacks prompt M&A questions

Life sciences

Teresa Graham, currently head of global product strategy for Roche pharma, will become the division’s new CEO next month, Roche said Thursday. Simultaneously, Roche is elevating Levi Garraway, chief medical officer, to the executive committee.

February 4, 2023

J&J’s pharma group quietly works through global overhaul, with layoffs expected to reach multiple countries

Life sciences

Fierce Pharma has obtained internal documents and video of a town hall meeting conducted this week describing what J&J called a “comprehensive review” of its portfolio. Moving forward, J&J plans to operate its vaccines and infectious diseases outfits as one group, the executives explained.

How can we help you?

We're easy to reach