2009 compensation for Bristol-Myers Squibb CEO Cornelius falls 22 percent amid recession

Bristol-Myers CEO’s 2009 compensation down 22 pct

TRENTON, N.J. — The chief executive of drugmaker Bristol-Myers Squibb Co., James Cornelius, received a 2009 compensation package valued by The Associated Press at $17 million, down 22 percent from 2008, due to the much lower value of his stock awards.

The maker of blood thinner Plavix, schizophrenia treatment Abilify and HIV drugs Reyataz and Sustiva gave Cornelius a salary of $1.5 million, up just $12,000 from the year before.

The company announced last week that Cornelius is retiring on May 4 after 3 1/2 years at the helm.

His performance bonus edged up to $4.49 million from $4.48 million in 2008, according to a proxy statement filed Tuesday with the Securities and Exchange Commission.

Most of his compensation comes from long-term awards of stock options and restricted shares. That total fell 31 percent to $10.9 million in 2009, from $15.7 million in 2008.

Cornelius’s other compensation — all for use of a car — totaled $68,863.

Last year, Bristol-Myers saw revenue edge up slightly, as key drugs sold well despite the recession, particularly in the last quarter. Its profit for the year doubled to $10.61 billion, mainly because of a $7.2 billion one-time gain from selling its Mead Johnson nutrition business.

During the year, Cornelius steered Bristol-Myers through the final steps in its transformation from a drug and health products maker to a pure biopharmaceutical company, splitting off the baby formula business in December and buying promising biotech firm Medarex for $2.1 billion in August.

Cornelius and Chief Operating Officer Lamberto Andreotti since late 2007 have been executing their “String of Pearls” strategy to acquire biotech companies and experimental drugs. They have already done 10 such deals, with Medarex being the most important. Meanwhile, the New York company has eliminated debt and now has about $10 billion in net cash available for more deals.

They are needed because Bristol-Myers will lose patent protection in the first half of 2012 for both its $6.1 billion-a-year blood thinner Plavix, the world’s second-best-selling drug, and for Avapro, a high blood pressure drug that brought in $1.3 billion in 2009.

The Associated Press’ compensation formula is designed to isolate the value a company’s board placed on the executive’s total compensation package during the last fiscal year. It includes salary, bonus, performance-related bonuses, perks and the estimated value of stock options and awards granted during the year.

The calculations don’t include changes in the present value of pension benefits, and they sometimes differ from the totals companies list in the summary compensation table of proxy statements filed with the SEC. Those reflect the size of the accounting charge taken for the executive’s compensation in the previous fiscal year.

Bristol-Myers said its board decided last week that Andreotti, 59, who will take over from Cornelius as CEO, will receive an annual base salary of $1.4 million as well as annual and long-term performance bonuses.

During the transition period, Cornelius, 66, will be paid a retainer of $175,000, half in stock and half in cash. He also will get an annual nonexecutive chairman retainer of $200,000, also half in stock and half in cash.

At the company’s annual meeting on May 4 in Plainsboro, N.J., stockholders will have three shareholder proposals to consider.

One would require the company to publicly report on its use of animals in research and product testing, as well as on its efforts and future goals toward eliminating use of research animals.

The second proposal would require the company to identify by name and title in all future proxy statements every executive officer receiving compensation exceeding $500,000 a year. Currently, the proxy statement, which discusses executive compensation and other matters ahead of the annual shareholders meeting, only discloses compensation for the company’s top five officers.

The third proposal would enable holders of a majority of outstanding shares to take action in writing, between annual shareholder meetings, on urgent matters.

The board of directors opposes all three proposals, according to the proxy.