The board of directors at Boston Scientific Corp. gave themselves a 25 percent pay raise and handed out bonuses to top-level executives — including $16.6 million worth of stock to CEO James Tobin — after a year that saw the company’s stock price drop by nearly a third of its value.
In a proxy statement filed with the federal Securities and Exchange Commission March 18, the company increased annual payments to board members from $60,000 to $75,000. Committee chairmen receive an additional $20,000 retainer.
The Natick medical device giant also reimburses board members for all travel, food and incidental expenses incurred on company business and awards them $125,000 worth of stock.
BSC shares rebounded slightly this month after precipitous declines last year, when prices plunged from over $11 per share to $7.80 by year’s end.
And the board wasn’t the sole beneficiary of its own generosity. Company executives also received hefty bonuses and pay raises in 2008. Fredericus Colen, EVP and group president of BSC’s cardiac rhythm management division, got the largest raise, a 5.5 percent bump.
CFO Samuel Leno and sales SVP for the CRM segment William McConnell Jr. were also rewarded with higher-than-standard raises.
Leno got an incentive bonus for “outstanding performance in leading activities to address corporate-wide expense and headcount reduction initiatives and continuing the successful management of debt covenants,” according to the filing. All told, Leno took home $6.3 million in salary, stock and bonuses last year, up $2 million from 2007.
CEO James Tobin also earned a raise, which brought his base salary to $994,000 for the year. And while his incentive bonus was about 25 percent shy of its 2007 mark, the CEO got a stock option grant of 2 million shares at an exercise price of $8.30, to vest over the next four years. The total face value on the stock is $16.6 million.
It’s Tobin’s first equity grant in two years, but Watson Wyatt, the company’s new compensation consultants, said needed the boost as an incentive and to “promote stockholder alignment.”
BSC said Tobin’s bonus was lower than in 2007 because “certain performance goals remained unresolved, including clearing our FDA corporate warning letter, missing specified top and bottom line financial results, incomplete transition of our CRM business to new leadership by year end and lagging expectations regarding our CRM and drug-eluting stent market share.”
All told, Tobin took home $8.6 million for 2008, compared to $9 million in 2007.
The company also paid out a hefty separation bonus to former COO Paul LaViolette, who was ousted in June 2008 — more than $9 million in cash, incentives and benefits payouts. LaViolette, who spent more than 15 years at Boston Scientific, works out of the Boston office of SV Life Sciences Ventures, a venture capital firm.