Genentech is taking $371 million earmarked for its stock option plan and putting it all into retention bonuses as it negotiates with Roche over a buyout. If Roche reaches a deal to buy the outstanding shares of the biotech giant before next July, an odds-on favorite with deal makers, the money gets handed out along a sliding scale. Starting at the top, CEO Art Levinson stands to gain an $8.4 million retention bonus with other execs qualifying for $2.7 to $4.6 million apiece. Rank-and-file workers get less. Not only that, but there's a separate fund for severance pay if the execs face a reduction in authority or anyone is asked to move more than 50 miles.
Genentech particularly wants to keep its scientists in place. They are responsible for creating one of the most valuable pipelines in the biotech industry, and no one wants to upset the geese that are laying the golden eggs. Of course, the big money is set up to reward the top players in the company, who now stand to make big gains from a deal.
- check out the Wall Street Journal Blog take
ALSO: Scientists are skeptical that Genentech's anti-cancer drug, Avastin, will show any benefit in peventing the recurrence of colorectal cancer following surgery. See the Financial Times article for more.