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This excerpt taken from the AGN DEF 14A filed Mar 21, 2007. Peer
Group
The Compensation Committee annually reviews current market
compensation data from two national independent surveys of
pharmaceutical, biotechnology and medical device industry
participants as well as a peer group of companies selected based
upon factors including size, employment levels, market
capitalization and product lines. These two sources of data are
complementary to one another and are used to provide the
Compensation Committee with a broad view of compensation
practices and levels in the competitive marketplace. The survey
company data provides a broader
industry-wide
component, while the peer group company data provides
information regarding companies most directly comparable to us
based on the factors discussed above. Many of the peer group
companies are listed in the AMEX Pharmaceutical Index. Certain
companies not included in the AMEX Pharmaceutical Index were
also considered peer group companies because they are comparable
to us based on size, scope of operations, line of business, or
because they may compete with us for executive talent. Certain
companies in the AMEX Pharmaceutical Index were not considered
peer group companies because they were not comparable in terms
of size or line of business, are not considered competitors for
executive talent or because compensation information for those
companies was not available. The peer group for the Compensation
Committee’s January 2006 review of executive compensation
consisted of the following companies: Alcon, Inc., Amgen Inc.,
Biogen IDEC Inc., Cephalon Inc., Chiron Corp., Forest
Laboratories, Genentech Inc., Genzyme Corp., Gilead Sciences
Inc., King Pharmaceuticals, Eli Lilly and Company, Medicis
Pharmaceuticals, MedImmune Inc., Pfizer Inc., and Wyeth.
The Compensation Committee, with the help of the consultant,
periodically reviews the composition of the peer group and the
criteria and data used in compiling the list, and considers
modifications to the group. Throughout 2006, the Compensation
Committee reviewed data provided by the consultant regarding the
appropriate companies
Table of Contents
to include in the peer group and the effects such a change would
have on the median and 75th percentile for base salary,
total cash compensation,
long-term
equity incentives and total direct compensation for the peer
group. In September 2006, the Compensation Committee revised the
peer group, which is now composed of: Alcon, Inc., Amgen Inc.,
Biogen IDEC Inc., Celgene Corporation, Cephalon Inc., Endo
Pharmaceuticals, Forest Laboratories, Genentech Inc., Genzyme
Corp., Gilead Sciences Inc., Johnson & Johnson, Eli
Lilly and Company, Medicis Pharmaceutical, MedImmune Inc.,
Mentor Corporation, Sepracor Inc., and Wyeth. The Compensation
Committee determined that this group of peer companies was more
representative of our executive talent pool and our product and
market profile, appropriate from a revenue size perspective and
comparable in terms of performance and recognition in the
marketplace. The change in the composition of the peer group
resulted in a slight decrease in the average compensation
provided by the peer group, particularly with respect to total
direct compensation.
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