Teva exec remuneration mystery deepens

Shiri Habib-Valdhorn

Direct cash compensation of 11 executive officers was $12.7 million in 2012, exercised options were worth $4 million, and they received 1.3 million options.

There is still no clear answer to the question how much Teva Pharmaceutical Industries Ltd. (NYSE: TEVA; TASE: TEVA) executives are paid. As a dual-listed company, Teva is not required to disclose executive salaries, in contrast to companies listed only on the TASE or on Wall Street.

A class action suit has been filed against Teva demanding disclosure of this information.

Yesterday, after meeting Teva executives, Bernstein Research analyst Dr. Ronny Gal estimated the aggregate compensation of Teva's top five executives at $20 million a year. A few hours later, he retracted the estimate. "Teva has contacted us stating this was a misunderstanding on our part," he wrote. Teva directed him to details included in the company's 20-F filing with the US Securities and Exchange Commission (SEC).

On the basis of the data, it is not possible to know exactly what the five executives were paid, but they imply that Gal's estimate was too high.

According to the F-20 filing, Teva had 11 current executive officers (including CEO Dr. Jeremy Levin, CFO Eyal Desheh, Chief Scientific Officer Dr. Michael Hayden; and the heads of the geographic regions, Dr. Robert Koremans, Prof. Itzhak Krinsky, and Judith Vardi). The aggregate direct cash compensation paid to or accrued on behalf of these 11 executive officers was $12.7 million in 2012. They also exercised options worth $4 million, and received 1.3 million options.

Three of the eleven executives joined Teva during 2012, appointed by Levin after he took up his post at the company. This suggests that the compensation for these three executives in 2012 was partial.

Teva's compensation package is based on meeting sales, profits, and cash flow targets. A cost-cutting target has also been added. At the same time, five executives, including former CEO Shlomo Yanai, left Teva during 2012. These executives' aggregate compensation was $14.7 million in 2012.

Published by Globes [online], Israel business news - - on March 7, 2013

© Copyright of Globes Publisher Itonut (1983) Ltd. 2013

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