Elan, the troubled pharmaceutical group, is to offer a large number of share options to persuade important staff not to leave.
As part of a programme to incentivise key senior and technical employees, the group will seek approval today at its annual meeting for the issue of up to 7.5 million new share options, which would be equivalent to 2.1 per cent of the current issued capital.
The heavy-hitters on the board of directors are set to face the wrath of shareholders at today's meeting, the first such encounter since the collapse in the company's share price.
But the meeting, which will be chaired by the company's new chairman Dr Garo Armen, is expected to generate more heat than light.
Low-key affairs in the past, today's meeting is expected to attract around 500 people to Dublin's Burlington Hotel, most of them small shareholders angered by Elan's fall from grace.
Shares in the drugmaker have plunged by more than 90 per cent since January amid concerns over its accounting practices and worries about its ability to meet its medium-term debt obligations.
Once the largest company on the Irish stock market, Elan is now worth around €800 million compared to €22 billion a year ago.
"I think it's going to be a pantomime with disgruntled retail investors. There will be a lot of questions from that quarter," one observer said.
Dr Armen may provide a progress update but given that the company's asset disposal programme has only just got under way, Elan is not expected to have anything material to report.
"The plan is to divest products and businesses over the next six to nine months. This involves a solicitation process and then a diligence process and you don't do that overnight," one source close to the company said.
The search for a new chief executive to replace former chairman and chief executive Mr Donal Geaney has also begun but again, it is expected to be another few months before there is anything to report on that front.
Analysts said, however, that the meeting would give shareholders a chance to meet Dr Armen who took over as chairman after Mr Geaney stepped down in July.
"The new chairman will be there and it will give us a chance to assess him in the flesh, not just over the telephone," said Mr Ian Hunter, analyst with Goodbody Stockbrokers.
Elan will ask shareholders to authorise it to buyback up to 15 per cent of its shares. But the company has said this is simply an enabling authorisation, which it has had in the past, and it has no immediate plans for a buyback.
A number of directors are also seeking re-election to the board which, apart from the removal of Mr Geaney and former vice-president Mr Tom Lynch, remains unchanged. Those seeking re-election include former IDA Ireland chief executive Mr Kieran McGowan; former managing director of Goldman Sachs International, Dr Alan Gillespie; Dr Dennis Selkoe, founder of Athena which is now owned by Elan; former US Attorney General Mr Richard Thornburgh and former Merrill Lynch chairman and chief executive Mr Dan Tully.
Despite the company's recent performance, analysts said there were unlikely to be any problems with their re-appointment. - Additional reporting (Financial Times Service)
