Two former Elan chiefs on full pay

TWO former Elan executive directors, who resigned last year when the company was besieged over its accountancy policies and the share price fell dramatically, are still receiving full pay, sharing a €2.17 million pay package in 2002.

Figures filed with the US Securities and Exchange Commission show that former chairman and chief executive Donal Geaney and former deputy chairman Thomas Lynch who resigned last July received €1.21m and €967,875, respectively in 2002 alone. However, both men are still employed as advisers to chairman Garo Armen on their base salaries.

Mr Geaney is on a €554,684 pay packet until July 2004, while Mr Lynch is being paid €442,875 a year until the same date.

Mr Geaney, who held 1.143 million shares in the company at the end of 2002, also has options to purchase a further 2.5 million shares, while Mr Lynch holds 800,000 shares with options on a further 1.3m shares.

No details of the compensation package of the company’s current president and chief executive G Kelly Martin, who was appointed in February 2003, are disclosed in the 550-page filing which Mr Martin signed off on Thursday.

Elan shares increased by just 1.89% yesterday on top of the 25.30% increase on Thursday, following the resolution of accounting problems with US regulators.

A 9.43% gain early yesterday was surrendered when some shareholders decided to take profits on the previous days gains.

The share price rise came following the filing of the FORM 20-F document beating a deadline that might have led to a default on as much as $2 billion in debt.

However, the inclusion of a “Fundamental Uncertainty” paragraph in the auditors’ report is causing some concern. Merrion Stockbrokers analyst Peter Frawley said the most important statement in the auditors report was the inclusion by the auditors of a “Fundamental Uncertainty” paragraph in its audit report which highlights the unquantifiable risks surrounding the SEC enforcement investigation and the class action lawsuits.