Friday, June 15, 2007

Thinking Ahead

You never know when Greek mythology will make headlines. The founders of Cerberus Capital Management, the firm that’s taking Chrysler private, admitted they chose the name in ignorance of Cerberus’s prior life as a three-headed hellhound with the tail of a serpent. So what? It still beats lots of other corporate names we’ve come across of late: fake compound words like Idearc and CopyTele, meaningless jumbles of letters like DivX and Gensym, and mystical-sounding unwords like Eclipsys. And (sigh) Fifth Third Bancorp.

We have a new Greek-sounding best friend: Panacos Pharmaceuticals, Inc. (PANC). Panacos sounds like some sandals-wearing lyre-playing dude, but we can’t find him in Greek mythology nor locate any explanation from the company.

Anyway, Panacos just filed a nice little policy on stock option grants. When we spotted it in this week’s filings, we assumed it was penance for some horrific crime. But to our surprise Panacos isn't part of the backdating stampede, though in its proxy it did confess to an isolated stock option screwup so minor it hardly seemed worth mentioning.

In its new policy, Panacos promises to grant options only at real meetings (no unanimous written consents) and to use only meeting dates as grant dates. These are moves we’ve applauded elsewhere. The policy even tries to head off timing problems that could pop up with new employees:

The new hire may be notified that management shall recommend to the Compensation Committee and/or the Board of Directors, as applicable, an award, but that Equity Award shall not be approved until the subsequent meeting and it shall be dated the day of the meeting."

We’re wondering how well this last part really works. Panacos is a small biotech company trying to produce a breakthrough antiviral agent; the kind of place, in other words, where people live for stock options. So it’s hard to picture employees signing on without some assurance that board approval of their options is as certain as a boob job in Beverly Hills. But we’ll give Panacos the benefit of the doubt because they’re obviously gunning for this month’s Squeaky Clean Award. (Contrast the way these guys and these guys fooled around with stock option grants for new hires.)

Pictured above is a toy Cerberus, manufactured in France and advertised as suitable for children as young as 3. If you know any Goth toddlers who keep biting the heads off their Elmo dolls, this could make a nice birthday gift.