Teva's shareholders will meet Aug. 27 in Israel and they will be asked to approve a pay package for chief executive officer Jeremy Levin that would give him $3.7 million for 2012, including salary and bonus.
The company's notice to shareholders, with its proxy statement, were filed with the U.S. Securities and Exchange Commission on Thursday.
Specifically, the proposal calls for a 2012 bonus of $1,203,125 for Levin. The filing indicates that figure is 80.2% of his annual base salary and 57.3% of his target bonus.
The filing notes that when Levin joined Teva in February 2012, the company gave Levin options to purchase 450,000 shares of stock (with an exercise price of $46.04) and 115,383 restricted share units, "all of which vest, subject to Dr. Levin’s continued employment with the Company, in three equal annual installments beginning on the second anniversary of the grant date. Dr. Levin also received a one-time cash sign-on bonus in the amount of $1 million, which was paid in February 2013, was reimbursed for expenses incurred in connection with his relocation to Israel, and received other benefits generally granted to Teva executive officers."
The proxy includes a plan where Levin's bonus might reach as much as $3 million in 2013, depending on whether the company meets certain targets.
The SEC filing is here.
Teva is based in Israel, but its Americas headquarters is in North Wales, Montgomery County.
The leader in generic drug sales, Teva is trying to change its operation so it is not so dependent on generic revenue because competitors have depressed the profit margin on such drugs. However, Teva is still working on developing new, brand-name drugs that will be profitable.
Meanwhile, the company is trying to cut $1.5 billion to $2 billion in costs through 2015. It has already announced plans to close its factory in Sellersville, Bucks County.
Teva has also taken heat for allegedly not fully complying with Israeli securities law in the way it discloses compensation to executives and board members. The proxy statement includes a proposal to change the way the company spells out such compensation plans.