Human Capital & Careers

2000 CFO Pay: Genentech’s Lavigne Clears Nearly $24 Million From Options (Updated)

Also, Oxford Health's Thompson takes home $3.5 million. More.
Michelle GabrielleMarch 28, 2001

The boom in biotech stocks not only enriched speculating day-traders. Genentech, Inc. CFO Louis J. Lavigne, Jr. cashed in big-time as well.

Last year, Lavigne, Jr. earned $372,709 in salary, $310,000 in bonus and $27,100 in other compensation, according to the San Francisco, Calif.-based firm’s recently released proxy filing. This computes to a little more than $700,000, just about $5,000 more than he took home in 1999.

However, he made a big killing from exercising options. Total net gain: $23,970,926.

This brings Lavigne’s total 2000 pay package to $24,680,735.

Part of Lavigne, Jr.’s “other” compensation included Genentech’s matching payments under its 401(k) plan and supplemental plan for 2000, 1999 and 1998. He received $6,800 in matching payments under the 401(k) plan for 2000 and $6,400 in matching payments under the 401(k) plan for 1999. Under the supplemental plan, he received $20,300 for 2000.

On January 18, Genentech announced a 30 percent increase in net income for 2000, a 23 percent increase in product sales driven by its bio- oncology drugs, and a 28 percent increase in earnings per share. This is exclusive of the impact of the 1999 redemption of the company’s special common stock and related accounting treatment, legal settlements, and the impact of the cumulative effect of a change in accounting principle.

Total revenues for 2000 climbed 22 percent, to $1.7 billion compared to $1.4 billion in 1999. This increase is primarily due to product sales for 2000, which increased 23 percent to $1.3 billion from $1 billion in 1999, driven by anti-HER2 antibody sales. Contract revenues also contributed to the growth in revenues.

Among other companies whose proxies became public today:

  • In his first year as EVP and CFO at Oxford Health Plans, Inc., Kurt B. Thompson earned $325,000 in salary, $283,500 in bonus, and $33,576 in other compensation, according to the Trumbull, Conn.- based managed health care company’s recently released proxy filing. The amount paid to Thompson, who joined the company in March 2000, includes $13,646 for use of an automobile.

However, he also exercised options worth more than $2.86 million. So, his total compensation works out to $3.5 million.

In 2000, the company earned $265.1 million on revenue of $4.1 billion, down from $319.9 million on revenue of $4.2 billion in 1999.

As of December 31, 2000, Oxford’s total membership was approximately 1.491 million compared to 1.485 million as of the end of the third quarter of 2000. The increase in membership represents the first quarterly increase in membership since the Company began rationalizing product offerings in its commercial and governmental businesses in 1998 as part of its turnaround efforts.

  • FirstEnergy Corp.’s VP and CFO Richard H. Marsh earned $295,198 in salary, $81,881 in bonus and $19,441 in other compensation. Total Compensation: $396,520. In the previous year, Marsh earned $272,523 in salary, $103,407 in bonus and $18,817 in other compensation at the Akron, Ohio-based energy services holding company.

In 2000, net income was $599 million, compared with $568.3 million in 1999 while revenues were $7 billion, compared with $6.3 billion in 1999. Earnings improved in the fourth quarter as a result of higher electric sales, the addition of approximately 14,000 new electricity customers in the company’s regulated service area, continued economic growth in the local economy, and a 31.5 percent increase in power sales to customers in unregulated energy markets.

  • Gerald G. Pollack, SVP and CFO of Rayonier Inc., took home almost $1.3 million last year, according to the Jacksonville, Fla.-based cellulose fiber producer’s recently released proxy.

In 2000, Pollack earned $299,587 in salary, $200,000 in bonus, $152,519 in other compensation, and $245,445 in exercised options. He also received $372,120 in a LTIP pay-out. Total compensation: $1,269,671.

Included in Pollack’s “other compensation” was $108,347 toward moving and other relocation expenses.

In 2000, Rayonier earned $78.2 million on revenue of $1.2 billion, up from $68.7 million on revenue of $1 billion in 1999. Despite the increase, on March 22, the company said that its first-quarter earnings would be lower than a year ago due to a widening global economic slowdown. The company did not say exactly how much it expects to earn for the quarter

The company also said that it has reclassified a major timberland sale from the first quarter of 2000 as operating earnings, raising its full- year operating income to $189.5 million from $166.4 million.

  • Houghton Mifflin’s EVP and CFO Gail Deegan earned $347,750 in salary, $48,385 in bonus, and $20,082 in other compensation, according to the company’s recently released proxy filing. Total Compensation: $416,217. In the previous year, Deegan earned $333,000 in salary, $109,174 in bonus and $48,507 in other compensation at the Boston, Mass.-based publishing company.

Houghton Mifflin’s net sales for 2000 were a little more than $1 billion, an increase of 8.2 percent over 1999. Operating income in 2000 increased 25.1 percent to $140.1 million. The operating margin increased to 13.6 percent from 11.8 percent, benefiting from leverage on higher sales and operating efficiencies, partially offset by increased selling and implementation costs, higher losses at Computer Adaptive Technologies, and dilution from the acquisition of Virtual Learning Technologies in May 2000.

  • USFreightways Corp.’s SVP of finance and CFO Christopher L. Ellis earned $300,667 in salary, $178,800 in bonus, $203,184 in other compensation, and $275,000 in exercised options, according to the company’s recently released proxy filing. In addition, Ellis was issued $601,560 in restricted stock, which brings his total compensation to $1,559,211 for 2000, according to the company’s recently released proxy.

In the previous year, Ellis earned $280,000 in salary, $196,500 in bonus, and $45,354 in other compensation at Chicago, Ill.-based trucking carrier.

Under Ellis’ employment agreement, he is entitled to receive a minimum base salary of $200,000 as well as a discretionary annual bonus of which no amount is guaranteed.

The shares represented by the restricted stock award are subject to a forfeiture restriction if the company terminates Ellis or if he resigns. This restriction lapses with respect to 50 percent of the shares each on the third and fifth anniversary dates of the award. Dividends are paid on all restricted shares to the same extent as any other shares of the company’s common stock.

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