Boston Scientific Corp.’s (NYSE:BSX) newly appointed CEO Michael Mahoney signed on with a generous compensation package including a $2.25 million sign-on bonus in addition to his $900,000 base salary.
His offer letter, which also includes $16.7 million in long-term incentives through deferred stock and equity awards, is potentially worth nearly $20 million, according to SEC filings.
Mahoney, whose appointment was announced last week, will immediately receive a sign-on bonus of $1.5 million now and a $750,000 sign-on bonus when he’s officially bumped up to president & CEO in November 2012.
Officials said Mahoney, former diagnostics group and medical device worldwide chairman for Johnson & Johnson (NYSE:JNJ), will lead the company’s CRM and Endoscopy (GI and Pulmonary) business units as he learns the ropes at BSX.
While Mahoney transitions to the role of president & CEO over the next year, executive VP and cardiology group president William Kucheman will step in as interim CEO, effective October 17.
Kucheman will get a $900,000 salary while serving as interim chief, as well as a $3 million equity award.
Meanwhile, outgoing president & CEO J. Raymond Elliott will move from the corner office into a position as a senior advisor, working a minimum of 20 hours per week and commanding a $856,000 salary. Elliott will remain on the Boston Scientific’s board of directors.
The unusual terms of Michael Mahoney’s move from Johnson & Johnson to the corner office at Boston Scientific were driven by J&J’s insistence on enforcing a stringent non-competition agreement, according to the Wall Street Journal.
Part of the deal also calls for BSX’s top legal dog, general counsel Timothy Pratt, to personally ensure that Mahoney’s interim duties as president don’t involve any business lines that compete with Johnson & Johnson products, according to the Journal (paid).
The offer letter also includes an award of deferred stock worth $9.5 million as of the date of the grant and equity worth $7.2 million.
Other financial incentives include a supplementary cash payment of about $69,000, annual corporate jet use of up to $100,000, relocation benefits including 18 months of housing in Boston, reimbursement of up to $90,000 in legal fees associated with employment negotiations and the right to participate in the company’s retirement plan.