- The Washington Times - Wednesday, April 1, 2009

NEW YORK (AP) - Biogen Idec Inc.’s President and Chief Executive James C. Mullen received a 7 percent boost in total compensation in 2008, mainly due to a larger performance-based bonus, according to an Associated Press analysis to data filed with regulators Wednesday.

Overall, his compensation totaled just over $11.3 million, including a salary bump of 4 percent to nearly $1.2 million and a performance-based cash bonus of $2.4 million, up about 24 percent year-over-year.

Above-market earnings on deferred compensation totaled $96,352, and perks rose 61 percent to $257,919, including retirement contributions and tax planning reimbursements.

The bulk of Mullen’s compensation came in the form of restricted stock and options with an estimated value of just under $7.4 million when they were granted on Feb. 13, 2008, according to a Securities and Exchange Commission filing on Wednesday.

However, the options are “underwater,” since their $63.24-per-share exercise price is above Biogen’s current stock price of $51.88. That means the options are of little value absent a rebound in shares.

The Associated Press formula is designed to isolate the value the company’s board placed on the executive’s total compensation package during the last fiscal year. It includes salary, bonus, performance-related bonuses, perks, above-market returns on deferred compensation and the estimated value of stock options and awards granted during the year. The calculations don’t include changes in the present value of pension benefits, and they sometimes differ from the totals companies list in the summary compensation table of proxy statements filed with the Securities and Exchange Commission, which reflect the size of the accounting charge taken for the executive’s compensation in the previous fiscal year.

Mullen, 50, guided Cambridge, Mass.-based Biogen through a tumultuous year of increased scrutiny from Wall Street over lackluster sales of the multiple sclerosis drug Tysabri. In 2008, Biogen and partner Elan Corp. reported four cases of a rare brain infection in patients taking the drug. Concerns about the disease, called progressive multifocal leukoencephalopathy, caused Tysabri to be pulled from the market in 2005. Sales resumed the following year, with restrictions.

Though the company successfully staved off a takeover attempt by activist investor Carl Icahn in June, he has since come back for another round. Previously, he accused the company of rigging its search for a buyout partner so it would fail. The company has denied that allegation.

In its proxy filing Wednesday, Biogen said it recommends shareholders elect each of its board’s nominees and not the slate to be proposed by Icahn when the company’s annual meeting takes place on a date yet to be determined. The company also is proposing to amend its bylaws to require that directors be elected by majority vote. If a director up for reelection failed to meet that mark, the company wants to be able to require that person to resign.

In 2008, Biogen’s profit rose 23 percent to $783.2 million while revenue rose 29 percent to $4.1 billion. Shares, though, fell 16 percent to end the year at $47.63.

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