The new CEO at Wright Medical Group Inc. (NSDQ:WMGI) will make $750,000 a year in base pay and have a shot at another $750,000 in performance bonuses, according to the terms of his deal with the orthopedic device maker.
Wright tapped Robert Palmisano, 67, to be its new chief executive earlier this week. He takes over for interim president David Stevens, who had kept watch since former CEO Gary Henley resigned suddenly after a kickbacks scandal last year.
A medical device veteran, Palmisano was president and CEO of ev3 Inc. until its $2.3 billion buyout by Covidien (NYSE:COV) last year. He was the chief executive at IntraLase Corp. from 2003 to 2007 and held the same spot for MacroChem Corp. between 2001 and 2003. Palmisano is leaving a venture partner spot at SV Life Sciences to take the corner office at Arlington, Tenn.-based Wright.
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According to the terms of his deal, revealed in a regulatory filing, Palmisano will pull down a guaranteed bonus of 100 percent of his base pay, pro-rated to Sept. 1 of this year. He can triple his pay in 2012 with a 200 percent performance bonus, if he meets certain pre-set goals. Palmisano also gets a non-qualified stock option to purchase up to 610,000 shares of WMGI stock, which will vest in equal annual installments over a period of three years after the grant date. And he’ll get an annual equity grant equal to 300 percent of his annual base salary, composed of non-qualified stock options and restricted stock as Wright’s board sees fit.
Wright is still wrestling with the kickbacks scandal that erupted last year. In October 2010, it agreed to pay nearly $8 million to settle charges that it ran a kickback scheme to drive up sales of its hip and knee implants. Last week the company agreed to extend a deferred prosecution agreement after the feds accused it of violating the original deal.
In April, a surprise shakeup in Arlington saw the abrupt resignation – without severance – of former CEO Gary Henley and the outright firing of CTO Frank Bono, who was discharged "for failing to exhibit appropriate regard for the company’s ongoing compliance program." Three other senior executives resigned the next month, including former senior vice president for EMEA commercial operations Cary Hagan, who later fetched up as president & CEO of Intrinsic Therapeutics.