Genentech Launches Employee Retention Program
Aside from announcing that Genentech is not settling for Roche's $44 billion offer because it "substantially undervalues the company," the San Francisco-based biotech made it known that if would be implementing an employee-retention program to help its people make sense of the Roche deal.
This doesn't come as much of a surprise. Following the announcement that Roche was seeking to purchase the rest of its shares in Genentech—while bandying about words such as "redundancy" and "consolidation"—a number of Genentech employees took to the blogosphere to air their displeasure.
"I am a researcher with DNA and will put out my resume the second the deal goes through with Roche," posted Dan on the Wall Street Journal Health blog. "Many of us here do not want to work for Big Pharma."
"People WILL leave," posted another anonymous employee. "That is not a threat but reality. Genentech's strength is in the science and in people management—with this no longer in place—poof, there goes a great big chunk of history and amazing innovation and productivity."
In an interview with Pharm Exec, Genentech spokesperson Caroline Pecquet said that the objective of the program is to facilitate employee retention and address employee concerns in this time of uncertainty.
While she wouldn't give details of the program's conception, other than it involved a special committee and an outside consultant firm, she said that the program will have a number of components, including a cash retention bonus in lieu of the 2008 stock option program, an enhanced cash severance payment, health benefits coverage, and accelerated accrual of stock options under certain conditions.
"The concern is likely about what will be the result of any acquisition by Roche, and if it would be a dramatically changed environment for employees," Deutsch Bank analyst Barbara Ryan said. "They would be concerned about losing employees to other companies in the close vicinity—the most obvious being Amgen."
There is no word from Roche on whether it would enact a similar program for its employees. Roche already stated that it would eliminate its Nutley offices and move its headquarters to the West Coast in the event a deal is reached.
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