Rent: Not the Musical

So, as expected, Bristol-Myers Squibb posted its SEC filing with the employment terms for new CEO Jim Cornelius last Friday evening. On a conference call with reporters on Thursday, The New York Times' Stephanie Saul asked Chairman Jim Robinson if the drug company would continue paying $25,000 a month for Cornelius' Manhattan pad. He responded by saying that the terms of his employment would be disclosed in the SEC filing the following day but added, "I think you'll be pleased."

Well, here's the deal: according to the SEC filing, Bristol will keep paying the more than 25-grand (the new filing pegs the monthly rent at $25,500) for the next several months. "After September 30th, 2007, Mr. Cornelius will be responsible for his own housing arrangements," the document says. Apparently, that's when the company's lease on the apartment expires. And he doesn't have to worry about not having enough money to pay the gas and electric bill because Bristol reveals that it "will continue to pay for the utilities in such apartment through such date (Sept. 30, 2007)." All of this is public at

In the meantime, Bristol will be paying Cornelius $1.4 million a year. He's also eligible for a "guaranteed" bonus equal to 170% of his base salary and a "discretionary incentive payment" of at least 150% of his base salary if he hits performance goals. Bristol's giving him nearly half-a-million stock options and 60,000 shares of restricted stock. Cornelius also gets to use the company plane as long as he doesn't go overboard: more than $600,000 worth of annual flight time.

Some analysts think Cornelius' hiring means the company may not be for sale. But the employment agreement includes the standard "Change of Control" provisions. In other words, here's how much we'll pay you if the company gets sold and you find yourself out of a job. And Deutsche Bank's Barbara Ryan thinks a sale could still be in the cards. In a research note to clients today, Ryan upgrades BMY shares from Hold to Buy. Deutsche makes a market in Bristol shares, owns at least 1% of the stock, has done and wants to do more investment banking for the company. Anyway, Ryan thinks that a "sustained (earnings) recovery may be ahead." But she writes that "a potential takeout of BMY is still a likely possibility....", that the company may still be "in play."

Finally, in the interest of full disclosure, this blog posting is not sour grapes, but, yes, I'm not happy about once again not being given equal treatment with my print colleagues. Bristol made Cornelius available for at least two interviews last Thursday with reporters from The Wall Street Journal and the Newark Star-Ledger, but I was told through a spokesman that he would not be giving any TV interviews. I find this "media strategy" to be much more common, but not exclusively limited to big pharma. While there are a couple of big biotech CEOs who also avoid the TV lights, as a general rule, the younger, less buttoned-down CEOs of biotech are much more media savvy.

Questions? Comments?