Medco Executives Paid Max 2011 Bonuses; Express Scripts More Frugal
April 02 2012 - 12:04PM
Dow Jones News
Pharmacy-benefit manager Express Scripts (ESRX) declined to pay
bonuses to top executives last year after missing some financial
targets, but executives at just-acquired Medco Health Solutions
made out better, raking in millions as the company changed
hands.
Express Scripts chief executive George Paz, who also heads the
combined company, received total compensation valued at $8.5
million last year, a 17% decline. But Paz also received about $13.3
million on the value of vesting stock awards.
Meantime, Medco CEO David Snow, who is joining Express Scripts'
senior leadership team, saw his total compensation rise 15% to
$18.9 million. An 81% boost to a $4.9 million cash bonus, paid in
March this year with any remaining amount due after the deal's
close, was a difference maker.
Medco noted that Snow and four other executives were paid the
maximum cash bonuses under the company's annual incentive
plan--nearly $11 million in total.
The board of director's compensation committee "considered the
overall contribution of each of the named executive officers to,
and the significant shareholder value created by, the merger with
Express Scripts," Medco said in a regulatory filing. Medco was
purchased at about a 30% premium to its price before the deal was
announced last summer.
Snow also realized $2.4 million on the value of vested stock
awards last year.
Both pharmacy-benefit managers, or PBMs, filed details on
executive pay in Securities and Exchange Commission filings early
Monday, when the companies also closed their long-awaited deal. The
Federal Trade Commission concluded a long antitrust review with a
green light and without deal-related conditions.
Following the close, Express Scripts has changed its full name
to Express Scripts Holding Co.
CEO Paz, now head of the largest PBM, saw his compensation drop
as he received no bonus for 2011 after getting $2 million the prior
year. Express Scripts noted it fell short on certain earnings
related targets, "and therefore the bonus pool was not funded."
Express Scripts shares recently traded up 3.2% to $55.92.
-By Jon Kamp, Dow Jones Newswires; 617-654-6728;
jon.kamp@dowjones.com
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