Boston Scientific's Chief Executive Ray Elliott saw his compensation plummet in his first full year leading the company, as the device maker cut back on stock options and other bonuses granted when he first joined the company.
The Natick, Mass.-based maker of heart implants paid Elliott a total compensation package worth $4.7 million last year, down 86 percent from the $33.4 million package which welcomed him in 2009.
The company disclosed the information in its annual proxy report filed late Monday with the Securities and Exchange Commission.
Boston Scientific Corp. has struggled in recent years to manage its costs amid declining sales of its best-selling devices. The company is still paying off its massive 2006 acquisition of defibrillator maker Guidant for $27 billion. At the same time, sales of defibrillators and stents have been hit by safety concerns and cutbacks by hospitals reeling from the weak economy.
For full-year 2010, the company's adjusted earnings fell 11 percent to $1.05 billion, or 69 cents per share.
Elliott received a base salary of $1.2 million, up from roughly $600,000 in 2009, when he was only with the company for about six months. His performance bonus for the year also increased 72 percent to $1 million from about $607,000 last year.
Many of the perks Elliott received in his first half-year were not part of his compensation in 2010, including a $1.5 million signing bonus and $14.2 million in stock awards.
The company's board of directors explained that the awards initially granted to Elliott amounted to three-years' worth.
"No additional grants of equity-based awards are expected to be made to Mr. Elliott prior to the third anniversary of his hire date," the board states.
The value of Elliott's stock options for the year declined 86 percent to $2.1 million.
Elliott, 61, also saw a drop in his "other compensation," which declined 70 percent to $375,000. In 2009 he received $1.3 million, which included the costs of relocating to Massachusetts.
He was previously CEO of orthopedics maker Zimmer Holdings Inc. which is based in Warsaw, Ind.
Since joining the company in June 2009, Elliott has tried to reposition Boston Scientific by cutting 10 percent of the work force and restructuring its business units.
The Associated Press formula is designed to isolate the value that the company's board placed on the executive's total compensation package during the last fiscal year. It includes salary, bonus, performance-related bonuses, perks, above-market returns on deferred compensation and the estimated value of stock options and awards granted during the year.
The calculations don't include changes in the present value of pension benefits, and they sometimes differ from the totals companies list in the summary compensation table of proxy statements filed with the Securities and Exchange Commission, which reflect the size of the accounting charge taken for the executive's compensation in the previous fiscal year.
The company will hold its annual shareholder meeting May 10 in Boston.