Elan Corp chief executive Kelly Martin is to step down from the post at the beginning of May 2012 after the Irish drugmaker changed his contract to a fixed term from an open-ended agreement.
The move is intended to “provide employees, patients, business collaborators and investors with clarity and continuity on the executive leadership of the company”, Elan claimed, It added that Mr Martin will then serve as an “executive adviser” until January 31, 2013, then “after a decade of service…he will have completed his commitment to the company”.
Elan chairman Kyran McLaughlin, who also recently announced that he is retiring in the next few months, said a long-term leadership succession planning is “an important part of good governance policies”. He added that the amendments to Mr Martin’s employment arrangements “are a necessary and desirable part of this commitment” and Elan added that the new timeframe will enable it to “conduct a comprehensive succession process”.
Mr Martin’s reign at the helm of Elan has been a turbulent one at times. He took over in 2003, joining from bankers Merrill Lynch, as the Dublin-headquartered firm was reeling after US government probes into its accounting practices. For a good few years, Mr Lynch was given credit for turning Elan around but the last two years has seen some high-profile investors express their dissatisfaction with the way the business has been managed.
One, Jack Schuler, who has since joined the board at Elan, was particularly vociferous in his criticisms of Mr Martin saying at the end of 2008 that “he has no experience in pharmaceuticals or in managing any type of operation”. Mr Schuler also expressed his concerns about “inappropriate and outlandish expenses”, notably the use of private jets for executives.
Most recently there has been concern over the way an agreement with Johnson & Johnson was handled, involving Elan’s investigational Alzheimer’s disease drugs, while the management’s recent announcement that it is looking at spinning off the company’s drug-delivery business, Elan Drug Technologies has attracted criticism in some quarters.
