Several ICN Pharmaceuticals shareholders on Wednesday asked Chairman Milan Panic to explain the company’s low stock price as well as the pay and benefits that make him one of the highest paid executives in the state.
At the Costa Mesa company’s annual shareholders meeting, Panic was granted an option to purchase up to 200,000 shares of the company’s common stock at $6.50 per share at any time before September, 1993.
ICN stock, which traded as high as $30 per share in 1987, closed Tuesday at $6.25 per share. The stock option received by Panic will only have value if ICN stock rises above $6.50. According to ICN documents, Panic owned more than 700,000 shares of ICN stock as of January.
Stockholder Nathan Krantman, a retired doctor living in Laguna Hills, asked Panic to explain his stock option and salary while “we poor stockholders” earn little.
“Morally, I think I’m OK,” Panic said. “If I save one baby, I can’t be overpaid.”
ICN’s drug ribavirin is used to treat children with severe lung infections.
Panic went on to say that his pay is not excessive and that he was not going to defend his salary or benefits.
He said that an executive faced with the challenge of building a small company into a firm with $1 billion in sales can’t be paid too much. ICN had sales of $166.3 million for fiscal year 1988, which ended Nov. 30, and net income of $17.8 million.
Panic said that with patience, shareholders will receive the return they deserve.
Last year, Panic received a salary of $411,193, plus $274,324 in deferred compensation, and a $250,000 cash bonus. He also was given $15,000 for professional services provided by him, according to financial disclosure documents filed with the Securities and Exchange Commission.
In October, Panic and the company entered a 5-year contract worth at least $2.5 million. As part of that agreement, Panic will receive severance pay of five times his annual salary if he leaves the company within 2 years of a change in ICN’s ownership.
Panic was ranked as the 10th “most overpaid CEO” in the state in the current issue of California Business magazine. The magazine ranked chief executives based on their total compensation relative to the financial performance of their companies.
Also Tuesday, ICN’s board of directors voted to increase the company’s stake in its Viratek subsidiary to 80% from 73% of all 8.6 million Viratek shares outstanding. Viratek is ICN’s drug development subsidiary.