The summons for the Teva Pharmaceutical Industries Ltd. (NYSE: TEVA; TASE: TEVA) general shareholders meeting, which will be held on August 27, asks the shareholders to approve the $2.7 million salary and annual cash bonus for president and CEO Dr. Jeremy Levin for 2012, and a performance-based bonus of up to $3 million for 2013.
Levin's base salary is $1.5 million a year, and his annual cash bonus based on the level of achievement of qualitative and quantitative performance goals for the company and other performance objectives established by the human resources and compensation committee.
If the achievement of performance criteria is below the threshold of 85%, Levin will not receive a bonus. If the 85% threshold is achieved, he will be eligible to a bonus of 8.75% of his base salary, amounting to $131,250. If the performance target is fully reached, he will be eligible for a bonus of 140% of his base salary, or $2.1 million. If the performance achievement is above the threshold, he will receive a bonus of 140% of his base salary, plus a discretionary amount determined by the human resources and compensation committee.
The summons states, "Dr. Levin’s targets for 2012, the initial year of his employment with the company, were based on company-wide strategic and operational goals, including the company’s sales and income during the year, strengthening the leading position of Copaxone, restructuring the company to better address future global medical, social and consumer needs, and contribution to shareholder value."
The summons states that the board of directors determined a 94% achievement of Levin's performance goals and recommends that the shareholders approve a cash bonus $1.2 million for 2012, amounting to 80.2% of his annual base salary and 57.3% of his target bonus. The summons adds that the board of directors believes the compensation is fair and reasonable considering Teva's complex business and global operations and Levin major role in the company’s performance in 2012.
As for 2013, the board recommends that 85% Levin's cash bonus be based on Teva performance targets, including the net revenue and operating profit targets and pipeline milestones, and 15% on an evaluation of his overall performance by the board with respect to strategy and values implementation, collaboration, leadership and integrity. His maximum bonus, assuming a 125% performance achievement, is 200% of his base salary, or $3 million.
When Levin joined Teva in February 2012, he received $1 million and customary reimbursements, options for the purchase of 450,000 shares at an exercise price of $46.04 (Teva's closing price on Nasdaq on the date of the grant) and 115,383 vested shares.
Published by Globes [online], Israel business news - www.globes-online.com - on July 18, 2013
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