Merck’s latest SEC proxy statement was filed overnight. My overall review? I do approve. [Just four short years ago, I might not have so approved — there has been a night-and-day turnaround, here.]
With its clear, concise and plain English presentation — and easy to understand bold graphical references, I just wanted to commend Kenilworth on its transparency — about how it pays its top executives. We may all quibble about whether $24.2 million is really the amount needed to keep the CEO from looking for other work, but I will repeat that from 2013 through to today, his leading voice in all matters life science has been a stabilizing influence — often in fairly stark contrast with that of Ian C. Read, Pfizer’s chief. [And yes, I am aware that Mr. Read’s board paid him “only” $17.98 million, for 2015.]
More often than not, Mr. Frazier’s views sound like the only adult in that sandbox, at least to my ear. In particular, I would mention his views on US multinational tax policies, as very thoughtful, and balanced — compared to Mr. Read’s.
As to his pay more directly, I’d say that he has turned in pretty darn solid performance over the last three years — in a highly volatile and challenging environment. So, in Merck’s request for an advisory “vote on pay”, this year — were I a shareholder (I am not) — I’d vote in favor of the pay awarded Mr. Frazier, and his top four officers beneath him. Here is a link (page 54) — go ahead and read it for yourselves:
. . . .The Company Scorecard, which focuses on our most critical business drivers—revenue, EPS and pipeline—is described in more detail beginning on page 44. Our performance during 2015 resulted in above-target achievement (144 points vs. a target of 100 points) of our financial and research-based objectives. These results, combined with individual performance, determine annual incentive payouts to the majority of our employees, including the NEOs. Strong Company operating performance in 2015 along with NEO individual performance that ranged from 100% to 125% resulted in average annual incentive payouts for the NEOs of 156% of target in 2015. . . .
And so, onward, on a bright sunny cool Spring Chicago morning. Be excellent to one another — smile.