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PHARMACEUTICALS
In a statement read to analysts by the company's investor relations staff, Hassan said his review confirms the need for aggressive measures to stabilize the company and create a base on which to build a turnaround. He intends to use some of the savings to bolster key products such as the new cholesterol-lowering drug Zetia. The company will accelerate and intensify cost-cutting actions to deliver savings in excess of the $200 million target previously announced. It will launch a voluntary retirement program expected to yield a head-count reduction of at least 1,000 people as the first phase of a planned global workforce reduction. Other cutbacks include the elimination of bonuses for 2003, including Hassan's voluntary relinquishment of a possible $2 million for meeting performance goals; no payout of a 15% of salary profit-sharing program for all employees; a freeze on all routine merit increases through 2004; and tighter controls on new hires, meeting and entertainment expenses, and travel, including selling the corporate jet. Other executive privileges will be cut as well "to set the right tone at the top," the company says. The analysts were incensed that Hassan wasn't present to answer questions. However, the staff defended the CEO, citing his hard work and desire for transparency in releasing the news immediately, despite his own scheduling conflict. Hassan is expected to comment publicly with the release of Schering-Plough's third-quarter earnings in October and at a November meeting with analysts. |
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