ICN Chairman Collects Bonus Amid SEC Probe
ICN Pharmaceuticals disclosed Monday that Chairman Milan Panic, who is under investigation for alleged insider trading, received a $1.79-million bonus last year, more than double the $750,000 he got in 1996.
The Costa Mesa drug maker apparently based the bonus on big increases in its profit and stock price, which rose 31% and 150%, respectively, in 1996. Members of ICN’s compensation committee could not be reached for comment.
Panic, 68, got the bonus at a time when the Securities and Exchange Commission staff is seeking to bar him from serving as the officer of a public company.
The SEC staff is recommending that Panic be charged in connection with alleged insider trading prior to a 1994 announcement that suggested ICN might fail to get regulatory approval for Virazole capsules in the treatment of chronic hepatitis C.
ICN’s board has investigated the case and determined that Panic did nothing wrong, said Ben Lap, the company’s vice president of investor relations. “We believe in the long run he will be vindicated,” Lap said.
Panic settled SEC charges in 1991, without admitting or denying guilt, tied to disclosures several years earlier involving the safety and efficacy of Virazole in treating certain AIDS-related conditions.
The company’s proxy statement, filed Monday with the SEC, also disclosed that Heartland Advisors Inc., ICN’s largest shareholder, has proposed an age limit of 70 for directors, which would, in effect, require Panic to resign within two years.
The proposed retirement age of 70 “was not some pie-in-the-sky-number,” said Robert Wasserman, a drug analyst for Southeast Research Partners. “What Heartland was trying to do was create a reasonable” period in which Panic “could ease himself out.”
The proposal could have a big effect on ICN’s board, where six of the 15 directors are 70 or older. That includes 70-year-old Birch Bayh, the former U.S. senator from Indiana, and 75-year-old Norman Barker Jr., retired chairman of First Interstate Bank of California.
