Cause and effect?

April 13, 2006

Last week, Incyte Corp. (INCY) announced that it was discontinuing a drug used to treat HIV, which sent the stock down nearly 40% that day and prompted three Wall Street firms to downgrade the stock. Nice call guys! Remember: the rule isn’t buy high and sell low.

Well, yesterday Incyte filed its proxy and one would expect, well, at least hope, that a company whose five year chart looks like this would reflect those trends in the summary compensation table. Not a chance. While CEO and President Paul Friedman’s salary has declined over the past few years, his bonus climbed, up $200K since 2003. The other four executives also saw their bonuses climb during that period. Equally interesting is that the company has been forgiving a loan made to Chief Scientist Brian Metcalf — forgiving $383K over the past three years — which the company says was made for a home purchase. But at the same time, Incyte has been giving Metcalf a $36K a year housing allowance.

PS: Sorry for the delayed post this morning. I got a bit lost reading SEC comment letters on the executive pay issue. Very interesting reading. I’ll be posting more about this tomorrow. 

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