Tightening the belt (or not) at Allergan…

Sumo wrestlerWhen tough times hit, and companies and individuals alike cut back on spending, usually discretionary and big-ticket items are the first to go. As you might imagine, that can be bad news for a lot of companies — particularly one marketing breast implants, Botox and the modern equivalent of stomach stapling.

And so it is, judging by a new sentence tucked into the Risk Factors section of the 10-K that Allergan (AGN) filed recently:

“Many of our products, including Refresh_©, Botox_© Cosmetic, JuvâŸderm_©, Latisse_©, to a large extent the Natrelle_© line of breast implants, and to a lesser extent the Lap-Band_© System, have limited reimbursement or are not reimbursable by governmental or other health care plans and instead are partially or wholly paid for directly by the consumer. Sales of the Lap-Band_© System appear to be adversely affected by high levels of unemployment in the United States.”

Why this is just showing up now — with unemployment showing the first feeble signs of improvement, at least by some measures — isn’t clear. Nor is it clear just how much worse the Lap-Band business has been thanks to unemployment, or how much that may be offset by a recent FDA ruling that lets Allergan market the product to less overweight people in some circumstances. We can only wonder if this means that Botox isn’t adversely affected.

One thing that doesn’t appear to have been affected: executive pay at Allergan. According to the proxy that Allergan filed yesterday, Chairman and Chief Executive David E.I. Pyott saw his total pay rise to $12.6 million in 2010, from $12 million the year before, thanks to a modest increase in cash incentive pay and a $600,000 increase in the value of his pension (bringing it to $6.4 million).

It’s a relatively small increase, in the grand scheme of things. But then again, the company has barely beat the S&P 500 of late, so maybe executives thought it prudent not to loosen the belt too much.

Image source: Photocapy via Flickr