Golden Parachute for OmniCare CEO
The Wall Street journal had an interesting article about Omnicare's legal troubles. Mr. Gemunder's was CEO of Covington, Ky.-based Omnicare, the nation's largest dispenser of pharmaceuticals to nursing homes serving 1.4 million beds in 47 states. Obviously, Omnicare gets its profits from Medicare, Medicaid and health insurance.
Mr. Gemunder had been in charge since 1981, but recently retired with a large lump-sum pension payout. He's getting a $91 million pension payout, plus severance, vesting of restricted stock that bring his final payday to at least $130 million. And that's on top of the $14 million he bagged last year.
And what did the shareholders get for their money? Omnicare shares took a tumble last week after the company reported a shocking drop in the number of prescriptions it fills.
And what did the taxpayers and customers get? Omnicare has litigation costs amid evidence of kickback and billing schemes. For example, in November 2009, Omnicare announced it would pay $98 million to settle a civil case brought by the Justice Department that it paid kickbacks to nursing homes and took kickbacks from pharmaceutical companies, including Johnson & Johnson. Omnicare also agreed to pay $49.5 million in 2006 to settle Medicare fraud claims. And last month, new details emerged in a continuing kickback lawsuit in Illinois.
