[Updated: 6:17 pm Eastern, 3/5/10, with company comment.] Cell Therapeutics stock is trading at less than a buck, but the company’s board still rewarded its senior management with a big boost in the annual bonus column.
The Seattle biotech company (NASDAQ: CTIC) made the disclosure in a regulatory filing after markets closed for the week on Friday afternoon. The company’s compensation committee said it approved the bigger cash bonuses on March 1, partly because Cell Therapeutics reached its goal of shedding much of its debt, and was able to turn in its new drug application to the FDA for clearance to market pixantrone for non-Hodgkin’s lymphoma. The board “determined that the Company had achieved the maximum performance goal” under its operating program for 2009, according to the filing.
Investors haven’t done nearly so well. The stock closed today at 90 cents a share, down from its 52-week high of $2.23.
How much did management actually get?
CEO James Bianco received the same base salary of $650,000 last year that he received over the past two years, but he was awarded a cash bonus last year of $585,000—an increase of 61 percent over his bonus from the prior year. Bianco also got stock awards worth $11.3 million, according to the regulatory filing. The CEO’s combined compensation package was $12.6 million last year, compared with $1.5 million the previous year, mostly because of the value assigned to his stock awards.
Bianco’s bonus represented 90 percent of his base salary, which meant he received the biggest bonus among the company’s top five executives. President Craig Philips got a bonus worth $241,200, or 60 percent of his base salary; Finance chief Louis Bianco (the brother of the CEO) got $204,600 in a cash bonus (62 percent of his base salary); Communications boss Dan Eramian got $181,125 in his bonus (57.5 percent of his base salary) and chief medical officer Jack Singer got $119,000, representing 35 percent of his annual salary.
“Compensation earned is reflective of specific company milestones management met (financial goals, drug development, for example) to improve the overall performance of the company,” Eramian says. “All of the goals were laid out in detail in previous documents such as the 10k and proxy statement.”
The cash bonuses are separate from another batch of potentially lucrative rewards the board has provided to management if they reach a series of goals over the next two years. The goals include winning FDA approval of pixantrone, pushing the company into cash-flow positive territory, and boosting the stock price to $2.94. I reported on how those bonuses were disclosed just before Christmas.
Cell Therapeutics stock has been down for several weeks since FDA staff issued a critical report on pixantrone, saying it has “substantial” side effects for patients with non-Hodgkin’s lymphoma. The drug is the company’s only product candidate with a chance of winning FDA approval anytime soon. An FDA advisory panel is scheduled to recommend whether the drug should be approved on March 22, while the agency’s deadline to complete its review is April 23.
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