Medco Executives Paid Max 2011 Bonuses; Express Scripts More Frugal

Pharmacy-benefit manager Express Scripts (ESRX) declined to pay bonuses to top executives last year after missing some financial targets, but executives at just-acquired Medco Health Solutions made out better, raking in millions as the company changed hands.

Express Scripts chief executive George Paz, who also heads the combined company, received total compensation valued at $8.5 million last year, a 17% decline. But Paz also received about $13.3 million on the value of vesting stock awards.

Meantime, Medco CEO David Snow, who is joining Express Scripts' senior leadership team, saw his total compensation rise 15% to $18.9 million. An 81% boost to a $4.9 million cash bonus, paid in March this year with any remaining amount due after the deal's close, was a difference maker.

Medco noted that Snow and four other executives were paid the maximum cash bonuses under the company's annual incentive plan--nearly $11 million in total.

The board of director's compensation committee "considered the overall contribution of each of the named executive officers to, and the significant shareholder value created by, the merger with Express Scripts," Medco said in a regulatory filing. Medco was purchased at about a 30% premium to its price before the deal was announced last summer.

Snow also realized $2.4 million on the value of vested stock awards last year.

Both pharmacy-benefit managers, or PBMs, filed details on executive pay in Securities and Exchange Commission filings early Monday, when the companies also closed their long-awaited deal. The Federal Trade Commission concluded a long antitrust review with a green light and without deal-related conditions.

Following the close, Express Scripts has changed its full name to Express Scripts Holding Co.

CEO Paz, now head of the largest PBM, saw his compensation drop as he received no bonus for 2011 after getting $2 million the prior year. Express Scripts noted it fell short on certain earnings related targets, "and therefore the bonus pool was not funded."

Express Scripts shares recently traded up 3.2% to $55.92.

-By Jon Kamp, Dow Jones Newswires; 617-654-6728; [e-mail]