Synthes CEO gets $51.9 million golden parachute and lucrative new job with J&J
Synthes CEO Michel Orsinger is getting his $51.9 million golden parachute payment even though he is getting a multi-million dollar job from J&J.
Like many people, Michel Orsinger works for a company going through dramatic change because it has been acquired by a larger company.
Unlike many people, Orsinger helped arrange the acquisition.
Unlike almost anyone, Orsinger is getting $51.9 million for leaving the old company and a multimillion dollar pay package from the new company. His new base salary of $700,000 will be a cut in pay from his old firm, but he will have some lucrative bonus opportunities. If he can make do clipping coupons for three years, he will get a stock package worth $17.2 million.
Orsinger is the chief executive officer of Synthes, Inc., the medical device manufacturer based in Switzerland but with U.S. headquarters and facilities in West Chester.
Global health-care giant Johnson & Johnson agreed in April to buy Synthes for $21.3 billion and the Orsinger arrangement is contingent on the J&J-Synthes deal closing as planned in 2012 or 2013. Both companies said in filings that they hope the acquisition closes in early 2012.
Orsinger could not be reached for comment Thursday. A J&J spokesman declined comment.
After 10 years in management with Novartis, Orsinger joined Synthes in 2004 as chief operating officer and was promoted to chief executive officer in 2007, when Hansjorg Wyss relinquished that title. Wyss remains chairman of the board of directors.
Neither man was charged by the Justice Department in the illegal human testing of bone cement in 2003 and 2004 that resulted in criminal charges against Synthes, a subsidiary and four executives. As CEO, Orsinger signed the corporate integrity agreement that was required by the Justice Department before the corporate charges were settled in 2010. Three of the four executives were sentenced to prison on Nov. 21. The fourth will be sentenced later.
Johnson & Johnson said in filings this week with the Securities and Exchange Commission that Orsinger would become J&J's Worldwide Chairman of a Global Orthopedics Group that will be comprised of the orthopedics businesses of Synthes and DePuy, which is J&J's existing orthopedics business. Orsinger will also watch over DePuy's neurological business unit.
The addition of Orsinger to J&J is noted in an SEC filing of a letter on DePuy letterhead to customers including hospitals and doctors that often choose the surgical devices and instruments used on patients. The letter notes that until the transaction closes, Gary Fischetti
The letter says J&J continues "to make steady progress with Synthes Integration planning activities and are more excited than ever about the potential for this merger to help us best meet your needs and ultimately, those of your patients. In the meantime, DePuy and Synthes will continue operating independently and it will be 'business as usual' for both companies. We look forward to welcoming Michel Orsinger to the Johnson & Johnson Family of Companies."
The letter to customers did not mention Orsinger's pay packages, coming or going.
In 2010, according to SEC filings, as Synthes went looking for a company to buy it, Synthes' board of directors gave top executives lucrative pay packages, part of which included golden parachute payments — the SEC filing actually uses the words "golden parachute" — to give them a soft landing if there wasn't a job for them with J&J after the merger.
Orsinger's precise figure — based on salary, bonuses and stock — was $51,948,153.