Boston Scientific Corp.'s top executive received about $2 million in compensation in 2007, a year when the company's stock lost a third of its value amid slumps in two key medical device markets and lingering problems from a 2006 acquisition.
James Tobin's total last year was about one-tenth of his nearly $23.1 million compensation in 2006, a year when he received about $15 million in restricted stock that could prove worthless unless the company's stock breaks out of its nearly four-year decline.
Tobin, Boston Scientific's 63-year-old president and chief executive, was granted a 2007 salary of $959,805, up 4 percent from 2006, according to a regulatory filing Wednesday. Tobin also was awarded $710,867 in non-equity incentives, and $334,518 in other compensation — primarily $288,098 for use of corporate aircraft.
Tobin was not granted any stock or option awards last year.
Associated Press calculations of total pay include executives' salary, bonuses, perks, above-market returns on deferred compensation and the estimated value of stock options and awards granted during the year. The calculations don't include changes in the value of pension benefits, and they can differ from the totals companies list in the summary compensation table of proxy statements with the Securities and Exchange Commission.
Boston Scientific said Tobin did not qualify for certain incentive payments last year because the Natick-based company fell short of several performance targets. Those include the company's failures to meet financial goals, resolve a U.S. Food and Drug Administration warning about quality control, and maintain market share targets for heart devices including stents and defibrillators.
Boston Scientific's stock ended last year at $11.63 apiece, down from $17.18 at the close of 2006. The performance extended a decline dating to mid-2004, when Boston Scientific's stock had briefly risen above $40.
Boston Scientific has struggled from downturns in the markets for drug-coated heart stents, which help keep coronary arteries open after surgery, and implantable defibrillators that help restore a normal heart rhythm.
Stent sales have been hurt by research questioning the devices' safety and effectiveness compared with older bare-metal versions, although some recent studies have called those findings into question. Defibrillators have been hurt by safety-related product recalls.
Boston Scientific's stock has also been hurt by the company's $27 billion acquisition in 2006 of Guidant Corp. — a deal that helped diversify a company that had become reliant on its Taxus stents to drive profit growth. However, the deal sharply increased Boston Scientific's debt, which led the company to sell off some operations last year. Last October, Boston Scientific announced plans to cut about 2,300 jobs, or 8 percent of its work force, and restructure operations to reduce annual operating expenses by around $500 million.
