New Hospira CEO Ball to see $12.4 million in pay in his first year

(Crain’s) — Hospira Inc. wooed its new CEO away from Allergan Inc., the Southern California maker of Botox, with compensation that will total $12.4 million in his first year.

F. Michael Ball, 55, is succeeding Christopher Begley, 58, who has run the company since 2004 and made $7.6 million in 2009, the most recent year for which compensation is available, according to a filing with the Securities and Exchange Commission by Hospira. Mr. Begley remains with the Lake Forest, Illinois-based maker of medical devices and injectable drugs as executive chairman.

Mr. Ball’s sizeable compensation is largely due to $6 million in one-time, “make whole” stock grants intended to make up for the loss of unvested stock options, grants and retirement benefits he would have received if he had stayed with Allergan, where he was president.

When Mr. Ball joins Hospira on March 28, he will see his compensation jump more than 2.5 times from the $4.8 million he made last year at Irvine, Calif.-based Allergan, according to SEC filings by the two companies.

“It is a big increase, but it sounds like it’s in line with what other CEOs make,” said Mark Reilly, executive compensation expert at Chicago-based Compensation Consulting Consortium.

For the money, Hospira isn’t expected to get a game-changer, despite Mr. Ball’s more than 25 years of experience in the drug business, some analysts say.

“As Mr. Ball has no prior CEO experience and Chris Begley will remain executive chairman, we expect that Mr. Ball will not make or be able to make any near-term game-changing reprogramming at Hospira, nor do we believe such changes are warranted,” Robert Goldman of CL King & Associates Inc. wrote in a March 10 report.

Hospira has 14,000 employees around the world, including 1,500 in north suburban Illinois where it has its headquarters.

In Ball, Hospira will be getting a 25-year veteran health care executive who has been with Allergan since 1995, helping the Irvine, Calif.-based company establish its presence in more than 100 countries. Ball has been Allergan's president since 2006, and prior to that held the top positions in the company's pharmaceutical and eye care businesses.