This CEO had 30 million reasons to stay when a rival came knocking
Hey, this ever happen to you? A rival company comes calling, and your employer wants to keep you so badly that you get a bonus potentially worth 30 times your salary? Yeah, me neither.
But it did happen to Stephen MacMillan, chairman and CEO of Hologic, a Marlborough-based medical tech company.
The episode dates to the end of 2017, but I hadn’t heard about MacMillan’s good fortune until Thursday, when The Wall Street Journal ranked him fifth on its new list of highest-paid CEOs for 2018. His total compensation was $42 million, up from $11.2 million in 2017.
A Journal footnote explained that “Mr. MacMillan received a special $30 million equity award, which vests over three to four years, after a larger competitor attempted to hire him.”
A Hologic securities filing from November 2017 offers a little more detail.
“In light of his long track record of success, other larger medical device companies have expressed interest over time in hiring Mr. MacMillan to serve as Chief Executive Officer. In October 2017, Mr. MacMillan received such an offer from a large medical device company.”
“The independent members of the Company’s Board of Directors considered the potential for disruption to Hologic and its business as well as the impact on stockholder value should Mr. MacMillan leave, and determined that it was in the best interests of Hologic and its stockholders to retain him.”
The award breaks down into $10 million in performance stock units tied to improving the company’s return on invested capital over three years; $10 million in PSUs tied to total shareholder returns; and $10 million in stock options, based on the company’s closing price from Dec. 1, 2017.
The remainder of MacMillan’s pay package included salary of $1.03 million, $9.26 million in other stock and options awards, $1.39 million in non-equity incentive plan payments, and $363,000 in other compensation.
Hologic has never disclosed which company made the offer that led to the equity grant, according to a spokesman.
The company’s stock has fared terrifically since MacMillan became CEO at the end of 2013, rising more than 100 percent, compared with a 59 percent gain by the S&P 500. Since the retention bonus was disclosed, however, that lead has narrowed: Hologic is up almost 17 percent vs. about 11 percent for the index.
It hasn’t been all smooth sailing for MacMillan. The company took impairment charges of more than $1 billion on its $1.6 billion acquisition of Cynosure, a maker of non-invasive body contouring, hair removal, skin revitalization products. Cynosure was hit by high turnover in its sales force following the 2017 takeover.
At the top of the Journal’s list, which included only CEOs of companies in the S&P 500, was David Zaslav of Discovery Communications, with a total package of $129.4 million. He was followed by Stephen Angel of Linde PLC ($66.1 million), Robert Iger of Disney ($65.6 million), and Richard Handler of Jefferies Financial ($44.7 million). All had their pay expanded by big onetime items.
Not making the Journal rankings, because his company isn’t in the S&P 500, was Stephane Bancel of Moderna, a Cambridge biotech. His haul was worth $58.6 million, mostly reflecting options awarded for his role in the completion of the company’s initial public offering.
It’s always nice to be appreciated.