Ex-Elan directors get $2m payout

THE two former senior executives at the drug company Elan received almost $2 million (€1.68m) in payments last year even though they resigned as directors almost two years ago.

Donal Geaney, former chairman and chief executive, pocketed $1.12m (€938,943) in 2003, while former vice-chairman Tom Lynch took home close to $900,000 (€754,573), according to the company’s annual report published yesterday.

The pair resigned from their positions following the collapse in Elan’s share price after an accounting scandal. They were retained as special advisers to new chairman Dr Garo Armen on full pay and benefits. This contract will end in July of this year.

Mr Geaney and Mr Lynch, both former accountants with KPMG, were pivotal in the development of Elan in the 1990s into Ireland largest firm with a value of €24.5 billion at one stage.

They stepped down from their high-paying jobs amid anger from investors about the collapse in the company’s share price.

The report says that Kelly Martin, the former Merrill Lynch banker who took over as chief executive in February 2003, was paid a total of $1.5m (€1,257,657) in 2003. This consisted of a basic salary of $702,854 plus a bonus of $800,000.

Elan’s 12 non-executive directors were paid a total of $1.12m (€938,955), up from $935,000 in 2002. The chairman, Dr Armen, was the highest paid non-executive director and received fees of $240,000.

Don Panoz, the American who founded the company in Athlone, received a payment of $160,000 and his wife Nancy a payment of $25,000.

Elan shares have recovered in the two years since concerns over its accounts were raised.

The company has been restructured significantly over that period with hundreds of jobs cut and several businesses sold off to stave off a cash crisis.

Under Mr Martin investor confidence has returned, though the cloud of the US Securities & Exchange Commission investigation into the company’s accounting policies is still hovering over Elan.