Bristol-Myers Squibb (NYSE: BMY) chief executive James Cornelius received a big raise in 2007 despite mounting problems faced by the company. Cornelius is set to make $13.5 million - five times his 2006 wage - as the company faces increased competition and a thinning development pipeline that has many investors worried.
Cornelius' compensastion consisted of a base salary of around $1.4 million, a bonus of $1.1 million, roughly $2.2 million in other incentives, and other compensation totaling $424,954. This other compensation included required company jet travel, car allowances, and a housing allowance. The remainder of his compensation came in the form of stock options and restricted stock worth around $8.4 million.
Shareholders didn't receive anything from the company during this same time period. In fact, the stock dropped 1.2 percent in 2007 while profit rose a mere 36.5 percent. Meanwhile, the company also announced that it would cut 10 percent of its workforce in an effort to restructure and save $1.5 billion by 2010.
The worst new for investors, however, is the expiration of its Plavix patent, which will cause a sharp drop in revenues. This will happen in November 2011 and the company also faces several more expirations over the next several years and generic drug companies continue to challenge patents.
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