Some sizeable pay packages are teed up for the incoming bosses of a Glen Allen firm.
Star Scientific disclosed this month the compensation deals that will be given to its new slate of top executives after a shakeup in the company’s ranks.
Michael J. Mullan, who is expected to take over in December as Star Scientific’s chairman and chief executive, will receive a two-year contract with a base salary of $600,000 for 2014 and $750,000 for 2015, according to SEC filings.
Mullan would also be due cash bonuses and stock grants should certain performance goals be reached. That includes the chance for a $150,000 cash bonus, stock options for 5 million shares of the company’s stock and a separate payment of $2.5 million. The performance thresholds include the success of certain products reaching the market.
Immediately available to Mullan will be options of 1 million shares of the company’s stock. Star’s stock closed Friday at $1.48 per share.
Incoming president Christopher C. Chapman’s two-year employment agreement calls for a base salary of $300,000 for 2014 and $375,000 for 2015, according to filings. He’ll also be due a cash bonus of $75,000 should certain products reach market.
His performance incentives also include a grant of 3 million stock options, 500,000 of which will be immediately available, and a potential separate payment of $1.25 million worth of common stock.
The two new executives will receive a car allowance paid for by the company, and they’ll be permitted to pursue their outside business activities.
Mullan and Chapman were revealed this month as the successors for the top two positions when Star Scientific disclosed a leadership overhaul that also includes the replacement of all but one of its board members.
The company attributed the shakeup to a strategic shift, although it follows a drawn-out controversy regarding questions over gifts and financial dealings between current Star Scientific chief executive Jonnie Williams and the family of Gov. Bob McDonnell.
Williams, who founded the supplement and pharmaceutical company, and current president Paul Perito are expected to resign at the firm’s annual shareholders meeting Dec. 27.
Williams will stay on for a year as a “non-executive employee,” assisting in patent prosecutions, new product development efforts and the like. Williams’s pay package will remain for that new position, including his $1 per month base salary.
Perito, who has held the role of president and COO since 2000, will become the company’s senior counsel, overseeing legal and regulatory affairs. He’ll hold that position for one year with a base salary of $500,000.
Mullan is chief executive of the Roskamp Institute and Archer Pharmaceuticals. Star Scientific has worked with the Roskamp Institute for three years on research related to anatabine, a chemical compound it uses for developing products.
Chapman has been on Star Scientific’s board since 2005. He is head of Chapman Pharmaceutical Consulting and a graduate of the Georgetown University School of Medicine in Washington.