Tom Pike, chief executive officer of life science giant Quintiles, stands to make more than $16 million in cash and stock if Quintiles’ merger with IMS Holdings wins shareholders’ approval – and he stays with the company through 2017.

The financial incentives for Pike were disclosed in an SEC filing last week and were reported first by David Ranii of The News and Observer.

Quintiles declined to comment on the matter beyond what was contained in the filing.

“We typically do not comment on executive compensation,” Phil Bridges, Senior Director, Corporate Communications for the world’s largest life science services firm, said.

The incentives include:

  • $7 million in restricted stock
  • Five $600,000 cash payments ($3 million)
  • $1,875,000 “Retention Award”
  • $4,609,000 “Additional Payment”

As Ranii reported, the incentives for Pike came about in negotiations over whether the two companies would merge. IMS wanted its chair and CEO, Ari Bousbib, to lead the combined company.

The merger, which is worth some $18 billion based on the stock value of the two companies, was announced in May. IMS would end up owning a slight majority of shares.

Pike, whose personal meeting with Bousbib helped set the stage for the merger, would serve as vice chair.

As a result of negotiations about the merger and who would lead the company, Quintiles (NYSE: Q) offered Pike numerous incentives to stay with the company post-merger through 2017. His existing executive employment contract was revamped, and Pike could see an influx of wealth beyond his annual salary of $1.2 million plus a bonus worth as much as another $1.6 million.

Compensation breakdown

As noted in the SEC filing, here’s the breakdown for Pike’s compensation:

“Under the Amendment, Mr. Pike will

“(i) receive an annual base salary of $1.2 million,

“(ii) participate in Quintiles’ annual performance incentive plan, or successor plans, at a target level of 150% of his then annual base salary, prorated for any partial year of participation (except that for the year 2016 the target level will be $1,616,667),

“(iii) be eligible to participate in any company equity incentive plans available to Quintiles’ executive officers (provided that in lieu of an equity award under such plans for the calendar year 2017, immediately prior to the effective time of the merger, Mr. Pike will be provided with an equity award in the form of restricted stock units with a target fair market value of $7 million, which award will vest, subject to acceleration in certain circumstances, in three equal quarterly installments on June 30, September 30, and December 31, 2017),

“and (iv) if the merger has been completed and Mr. Pike is employed by Quintiles or the Surviving Corporation on any of the following dates, he will receive a cash payment of $600,000 on each such date: December 31, 2016, March 31, 2017, June 30, 2017, September 30, 2017 and December 31, 2017 (each, a “Merger Award”).

“In addition, if the merger has been completed and Mr. Pike is employed by Quintiles or the Surviving Corporation on March 31, 2017, Mr. Pike will receive a cash award of $1,875,000 (the “Retention Award” and, together with the Merger Awards, the “Cash Awards”) and an additional cash retention payment equal to $4,609,000 (the “Additional Payment”).”

Read the full filing:

Read Ranii’s story at: