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Average CEO Compensation Rises for GWDN Index Firms in 2009

By Tony Fong

NEW YORK (GenomeWeb News) – More than half of the companies comprising the GenomeWeb Daily News Index reduced total compensation to their chief executives last year from 2008, but the average amount paid out by the firms still rose 10.5 percent year over year.

Eighteen of the 33 firms comprising the GWDN Index shrank the compensation packages to their CEOs in 2009, some by more than half. But a small number of companies also doubled, or more, their CEO compensation last year, raising the overall average compensation level in 2009 to $4.3 million in 2009, up from $3.9 million in 2008.

The figures were determined by an analysis of proxies and annual reports filed with the SEC. In total 31 of the 33 companies comprising the GWDN Index reported compensation for their CEOs, with Rosetta Genomics and Compugen the only ones not to do so.

One other company, Accelrys, disclosed compensation for its former President and CEO Mark Emkjer, who left the company in January 2009, but it did not disclose compensation for its current President and CEO, Max Carnecchia, who assumed the position last June.

In most cases, getting a company's comparative figures for 2009 and 2008 were straightforward, but for a handful of firms, apples-to-apple comparisons proved challenging, especially in instances when there were changes in top executives. Helicos BioSciences, for example, had three different CEOs in 2008, starting with Stanley Lapidus, followed by Stephen Lombardi, and finally Ronald Lowy, the president and CEO since December 2008.

Compensation for all three individuals in 2008 totaled $2.2 million, while Lowy's compensation for 2009 was a little less than $1.5 million, a 33 percent dip year-over-year. But the 2008 numbers include Lombardi's compensation for the eight months when he was with Helicos in a capacity other than as CEO, raising the total figure for that year.

On the flip side, Thermo Fisher Scientific had a change at the top last fall when Marijn Dekkers resigned as CEO and president, and the company promoted Marc Casper to both posts from his former job title as chief operating officer. As a result, Casper's compensation in 2009 shot up 270 percent to almost $34.3 million from $9.3 million in 2008. As part of his promotion, Casper was given $32.4 million in stock and option awards.

Combined with Dekker's $1.7 million in compensation for the roughly 10 months he served as Thermo Fisher's CEO in 2009, the company appeared to pay about $36 million in CEO compensation last year, a 92 percent increase from the $18.7 million Dekkers made in 2008.

However, it is unclear how much of the $34.3 million Casper made last year includes compensation he received from his prior COO position.

Also, the figures reported by the companies do not necessarily correspond to a CEO's take-home pay. Total compensation includes a broad range of categories, and generally includes base salary, bonuses, stock and option awards, and non-equity incentive-plan compensation.

The dollar amounts in stock awards and option awards that are reported by firms in their proxies are the accounting expenses incurred by the firms. As such, an executive's actual compensation may vary substantially from what is reported in an SEC filing, depending on if and when options are exercised and what the market prices are at the time they are exercised.

Regardless, a CEO's compensation package provides a glimpse into how a company and its board of directors, who determine CEO compensation, approach the process and how the company's resources are being spent.

Among the largest companies across all sectors, CEO compensation fell 9 percent to an average of $9.25 million in 2009 compared to 2008, according to an analysis by the trade union giant AFL-CIO of 292 companies comprising the S&P 500. So while CEOs of the companies in the GWDN Index, on average, may have made less than their counterparts in other industries last year, the economy appears to have had less of an effect on their compensation.

In some cases, the amount in CEO compensation paid out by companies shot up dramatically in 2009.

No firm in the Index saw its CEO compensation rise more than Exact Sciences, which paid Kevin Conroy, who is also the firm's president, $1.9 million in total compensation last year. That included a base salary of $268,077 and an option award of $1.5 million.

He took over as CEO of the company in April 2009. His predecessor Jeffrey Luber made $527,500 in total compensation in 2008, meaning the amount Conroy received in 2009 represented a 260 percent jump from Luber's compensation the year before.

Adding the $930,589 Luber received last year before he left Exact Sciences, the total in CEO compensation Exact Sciences paid in 2009, $2.8 million, was four times what it paid in 2008.

Other firms were similarly generous. Martin D. Madaus, president and CEO of Millipore, saw his compensation package double in advance of the firm announcing earlier this year that it would be acquired by Merck KGaA for $7.2 billion. In 2009, he received more than $6.7 million in stock awards and $1.3 million in non-equity incentive plan compensation on the way to making $10.9 million, up from $5.3 million in 2008.

And Caliper President and CEO Kevin Hrusovsky's package climbed almost 94 percent to $1.8 million in 2009 from $918,290 in 2008. While his base salary inched up less than 1 percent to $454,480 in 2009, he received a bonus of $599,914 — he received none the year before — and his stock awards rose to $648,115 from $163,600.

Acclerys, meanwhile, provided Emkjer with a nearly $1.7 million severance package last year, pushing his 2009 compensation to $2.7 million, up 90.5 percent from $1.4 million the year before.

2009 was not as generous to other CEOs, though. For example, Greg Lucier, chairman and CEO of Life Technologies, had a compensation package last year of $4.5 million, down about 60 percent from the $11.2 million he made in 2008.

The decline was not unexpected, though, as 2009 was Lucier's first full year as CEO of the company — the product of the $6.7 billion merger between Invitrogen and Applied Biosystems. In late 2008, when the two firms merged, Lucier was given more than $8.1 million in stock and option awards. In 2009 he received no stock or option awards.

Another chief executive who saw a sharp drop in 2009 was Douglas Berthiaume of Waters. Last year, he made $1 million, off nearly 59 percent from the $2.4 million he made in 2008. While his base salary remained frozen at $735,000, the biggest cut was in the category of non-equity incentive plan compensation. In 2008, he received almost $1.5 million in such compensation. Last year, Berthiaume, also Waters' chairman and president, received no such compensation.

In addition, Frank Laukien, president and CEO of Bruker, saw a 51 percent decline in his compensation last year to $809,748 from more than $1.6 million in 2008, the result of a voluntary cut in his base salary, to $318,750 from $425,000, as well as a reduction in option awards to $25,200 in 2009 from $817,000 the year before.

Celera President and CEO Kathy Ordoñez's compensation took a 46 percent hit last year, dropping to just short of $1.6 million from $2.9 million in the company's fiscal 2008. The biggest reduction came in stock awards. In 2008, that totaled more than $1.5 million. Last year, it fell to $257,717. Celera changed its fiscal year to match the calendar year in 2009 when it was spun off from Applera due to the Invitrogen-ABI merger.

Meanwhile, compensation for Robert Friel, chairman, president, and CEO of PerkinElmer, shrank 30 percent to about $4.9 million last year from almost $7 million in 2008. While his base salary rose to $908,654 from $822,115, he saw cuts in stock awards, option awards, and non-equity incentive plan compensation. Friel succeeded Greg Summe as CEO in early 2008.

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