Sweetening the pot for some?

December 27, 2005

Late Friday — the SEC clocks it at 5:26 p.m. — Johnson & Johnson (JNJ) filed this form that had some updated info about the severance being paid to Guidant (GDT) executives that looks — at least on the surface — as if J&J is sweetening the pot for some executives in its bid to buy Guidant.

Despite lowering its bid from $76 a share to $63 a share, severance payouts for a number of Guidant executives have grown since the deal was first announced. For example, former Guidant COO Guido Neels is set to collect $4.05 million in January, up from the $3.51 million earlier filings had him collecting. The latest filing also notes that 11 Guidant executives will receive $17.24 million in “cash severance”, a substantial change from the $13 million nine executives were set to receive based on previous filings. One thing that hasn’t changed is that Chairman James Cornelius and former CEO Ronald Dollens are still not collecting any severance, which makes the bigger payout even more interesting — certainly interesting enough to file late on a Friday.

Meanwhile, last week Guidant said it was still talking with Boston Scientific (BSX), which has offered $72 a share for Guidant. It’s not clear, however, what Boston Scientific would offer Guidant execs as part of any deal.

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