Mendota Heights-based Patterson Cos. is rescinding some stock options granted to its CEO Scott Anderson after discovering they had exceeded the limits of a shareholder-approved executive compensation plan.
An amended 2012 executive compensation plan limited the number of annual stock awards to any individual to 300,000 shares.
As part of Anderson’s fiscal 2016 compensation plan, the company awarded Anderson a grant of 250,000 premium-priced stock options primarily in recognition for his role in the $1.1 billion acquisition of Animal Health International, completed in June 2015. The board also had awarded him 42,698 options as part of his annual compensation package. The present value of both awards as disclosed in the initial proxy statement was $2.9 million.
The company also awarded Anderson 10,148 shares of restricted stock and performance-based restricted shares that had a maximum future payout of up to 35,216 shares. The present value of both of those awards was $1.5 million.
If Anderson were to earn the maximum number of all the stock awards, the result could have exceeded the 300,000 share limit.
To meet the requirements of the executive compensation plan, the company filed an amended proxy statement on Wednesday stating it had canceled some of Anderson’s premium-priced stock options.
He will now get 211,938 premium-priced options instead of the 250,000 shares.
The realized value of the options and stock awards depends on Patterson’s stock price when the awards vest or are exercised.
The company’s annual meeting is scheduled for Sept. 12 and shareholders who had already voted their shares have the option to revote their shares.
Company representatives could not be reached for comment.