- The Washington Times - Friday, March 20, 2009

WASHINGTON (AP) - The chief executive of Allergan Inc., maker of Botox anti-wrinkle injections and breast implants, received $13.6 million in total compensation last year, a more than 20 percent increase, according to an analysis by the Associated Press.

Irvine, Calif.-based Allergan disclosed CEO and Chairman David E.I. Pyott’s pay package in a regulatory filing with the Securities and Exchange Commission late Thursday.

The disclosure comes as the cosmetic surgery product maker’s stock hovers around $40 a share after losing roughly 30 percent of its value in the past six months. The recession has cut demand for many of the company’s more expensive, discretionary products.

For the year that ended October 2008, Pyott was paid a salary of $1.35 million, up 4.4 percent from $1.29 million for fiscal 2007. He also received a performance-based bonus of $1.2 million, down more than 45 percent from $2.2 million. Other compensation totaled $51,229.

The majority of his compensation came from stock and option awards that are now “underwater,” or worth less than on the day they were granted because of falling stock prices. Pyott’s stock options and restricted stock totaled $10.9 million, up 47 percent from $7.4 million. However, the shares were granted in February 2008 when company shares were worth more than $60 each, and the company is now trading around $40. The options have a strike price of $64.47.

While health care companies are generally considered a safe investment during economic downturns, Allergan has demonstrated that the sector is vulnerable to weakening consumer spending.

Last month the company said it plans to lay off about 460 employees as profits continue to slide. Allergan management said Botox patients are increasingly forgoing treatment, or stretching out the time between getting the wrinkle injections.

The Associated Press compensation calculation 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.

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