December, 2004

Maybe you remember that outrageous and wonderful movie with Peter Sellers playing all three main roles about the fictional European principality of Grand Fenwick. The idea was to declare war against the United States and then lose it to claim huge reparations. Funny. Very, very funny.

Ray Gilmartin could take the Sellers role in a reprise of the movie. Ray Gilmartin, should the name escape you, is the CEO of Merck. Merck as in Vioxx, Merck as in thousands (perhaps tens of thousands) of deaths from taking its now-withdrawn arthritis pain killer, Merck as in stock-dropping-like-a-stone.

The Merck Board of Directors in European-Principality-like wisdom has decided to reward its 230 most senior executives with a one-time payment of up to three times their annual salary and bonus. Executives who fiddled the drug safety tests so they could profit from Dorothy Hamill’s well known face touting their disastrous drug. Executives who ran the show since 1999, a period in which Merck’s stock took a 70% bath. Executives who, in a fair and balanced world would be facing fair and balanced jail time. You peddle a couple ounces of crack to fellow degenerates and get ten years in the slammer. You peddle an unsafe pharmaceutical (read drug?) to millions of the innocent and kill off a bunch, you get a ‘one-time-payment’ of three years salary and bonus. Only in America.

And who pays the bill without so much as a whimper? The stockholders. The folks who took the bath that the 230 drew, soapy water and all. It’s absolutely bizarre what stockholders in major corporations are willing to choke down with their Thanksgiving turkey. The most favored, most pampered, most sucked-up-to class of individuals in American society today is not the rock star or baseball player, it’s the inept, bumbling, worthless corporate executive. The enablers of this pandemic foolishness are the modern corporate boards of directors.

The company did not disclose how much the plan would cost if carried out. Well, I’ll just bet they didn’t. But it shouldn’t take a journalistic genius to figure it out from public records---200 mil?---half a billion? Anita Larsen, the Merck spokeswoman said Merck’s board first considered adopting the plan several months ago, well before it withdrew Vioxx. “It had nothing to do with the situation regarding Vioxx.” Well, of course it didn’t, Anita. The sweat on all 230 executives’ brows was really popping several months ago, but not apparently over wrongful deaths or possible jail terms, just how to squeeze an extra buck before the ship went down. Anita might be among the 230, maybe 227 or 228.

Tom Dewey, an attorney who consults to pill pushers and their corporate accomplices (excuse me, I meant boards) said Merck had “little choice” but to give talented executives an incentive to stay. One presumes this was not the Tom Dewey who lost to Harry Truman in '48, but even that's not entirely clear. Dewey’s quoted in the New York Times, saying that the new plan is “about protecting the senior management and executives.” Lord knows Merck didn’t care much about protecting the users of Vioxx.

Presumably Merck will hold their annual meeting in April of next year. By then the money will have been spent, so unless there’s an outcry from some institutional investor the dough will be as down-the-drain as Vioxx. If this decision is allowed to stand, then nothing useful was learned from the Enron disaster and we will have acknowledged that Wall Street rules with impunity.

Peter Sellers would have loved it!

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