The 2007 IBO Executive Compensation Survey includes 57 executives from 42 companies and is based upon the companies currently in IBO’s three Stock Indexes (see IBO 4/30/08) and Becton Dickinson. QIAGEN, Nanometrics and Starlims are excluded as a result of incomplete filings.

To create the tables, IBO selected one or two executives for each company who best reflect the company’s laboratory products or analytical instruments business. For each executive, IBO compiled the total short-term compensation, consisting of annual salary, bonuses and nonequity incentive compensation. Due to new SEC rules (see IBO 5/15/07), undetermined performance-related bonuses are listed as nonequity compensation. Non-performance related bonuses, bonuses based on the performance of targets that are substantially certain and noncommunicated performance-target bonuses are listed as bonuses.

Long-term compensation is determined based on the grant-date fair value of stock and option awards. This calculation follows the disclosure rules originally proposed by the SEC, which provide the full value for option and stock awards granted to executives in fiscal 2007. We believe this provides a more accurate total for the executive compensation received that year, whereas the amended SEC compensation disclosure calculates what the executives cost the company’s bottom line for a given fiscal year.

Total compensation consists of annual short-term and long-term compensation, change in pension value and nonqualified deferred compensation, as well as all “Other” compensation (“Other” includes contributions to qualified retirement plans and perquisites over $10,000). The tables also include the value realized on options exercised during fiscal 2007.

In 2007, the average total short-term laboratory product and instrument company executive’s compensation grew 12.1% to $1,299,345, including a 4.5% average increase in base salary to $547,146. Combined, the average bonus and nonequity incentive jumped 18.4% to $752,198. However, the total average bonus and nonequity incentive for the executives who received one or the other amounted to $840,692. Only 13 executives received bonuses in fiscal 2007. The average amount of these bonuses was $328,966; in comparison, the average bonus received by 27 executives in 2006 was $589,733. The decline was the result of a reclassification by the SEC of certain compensation that was previously reported as bonusus to nonequity incentive compensation. As a result, the average nonequity payment for an executive eligible under an incentive plan was $897,645 in fiscal 2007, compared to $511,305 in fiscal 2006. In fiscal 2007, 75% of executives received nonequity incentive compensation compared to 57% in the previous year.

The average total long-term compensation, including both fair value stock and options awards, declined 20.0% to $2,177,466 in fiscal 2007. However, excluding Danaher CEO Lawrence Culp, Jr., who received a payout of $46.2 million in fiscal 2006 (see IBO 5/15/07), the total average long-term compensation increased roughly 12.7%. This increase is primarily due to several large stock and option awards for performance-based measures. Edward J. Ludwig, president and CEO of Becton Dickinson & Co., reported long-term compensation of $9.6 million, five times the amount he received last year, while Jay T. Flatley, president and CEO of Illumina, received $9.3 million in long-term compensation, an increase of more than 150%. Edward H. Braun, the chairman and former CEO of Veeco Instruments, reported a 425% jump in fair-value stock awards to $4.7 million.

However, six executives did not receive any long-term stock or option compensation in fiscal 2007, compared to four in the previous year. Both John R. Peeler, the CEO of Veeco, and Mr. Braun did not receive annual bonuses as the company failed to meet minimum performance requirements. Thomas E. Oland, president and CEO of Techne, waived his cash and stock option bonus, as well as a salary increase. Steven D. Goldby, chairman and former CEO of Symyx Technologies, was no longer eligible to receive payments under the company’s bonus plan. Amit Kumar, president and CEO of CombiMatix, and David Schwartz, chairman of Bio-Rad Laboratories, also did not receive bonus awards.

Less than 40% of executives received nonqualified deferred compensation or recorded a change in pension value in fiscal 2007. For those who received a payment, the average compensation was $364,508, an increase of 88.3% from last year. The large increase was due to a $3.3 million payment to Tony L. White, president and CEO of Applied Biosystems. Other compensation increased 7.5% to $82,663.

Total average compensation for the executives declined 6.9% to $3,736,943. However, excluding the payment to Mr. Culp, total average compensation actually increased 16.5% to $3,709,678. Gregory T. Lucier, chairman and CEO of Invitrogen, led all executives with total compensation of $29.0 million. Mr. Lucier received a $2 million nonequity bonus based on operating income targets, and was also rewarded with a grant date fair value stock award of $26.0 million based on stock price performance. Mr. White and Mr. Ludwig received $16.5 million and $12.5 million, respectively, in total compensation. Also exceeding $10 million in total compensation were Roper Industries President and CEO Brian D. Jellison and Mr. Flatley.

Laboratory Instruments Index

The Laboratory Instruments Index consists of 32 executives from 23 companies. Average fiscal 2007 short-term compensation for these executives increased 19.6% to $1,329,101, and included a 5.7% increase in average base salary to $541,679. The biggest base-salary increase among Index executives went to Thomas J. Vacchiano, Jr., president and CEO of X-Rite. His salary rose 115% to $319,808. However, the largest base-salary compensation of $1,148,078 went to Mr. White. As for bonuses and nonequity incentive, the biggest payout was to Gregory L. Summe, president and CEO of PerkinElmer, who received $6.2 million, reflecting short-term incentive-bonus and performance-unit cash payments. As a result, the average bonus and nonequity incentive for the Index jumped 31.6% to $787,422. The total average compensation for the Index increased 6.5% to $3,535,870.

There were several changes to the executives in the Index. In March 2007, Affymetrix President Emeritus Susan E. Siegel resigned (see IBO 5/15/07) and was replaced by Kevin M. King, the former executive vice president of the Life Sciences division. Mr. King received a $100,000 sign-on bonus and payments totaling $173,169 for reimbursement of relocation expenses. Bruce Lancaster, CFO of OI, replaced William W. Botts as CEO in January 2007 (see IBO 3/31/07). Mr. Lancaster received a $25,000 hiring bonus. In June 2007, Steven D. Goldby, former CEO of Symyx, was appointed chairman, and Isy Goldwasser, formerly president, was named his successor (see IBO 4/30/07).

Process/Metrology/Motion Instrumentation Index

The Process/Metrology/Motion Instrumentation Index consists of eight executives from seven companies. The average short-term compensation for the Index declined 13.0% to $645,463 and included a 37.5% decline in average bonus and nonequity incentive to $226,426. The average base salary improved 10.3% to $419,001, while the total average compensation for the Index grew 9.1% to $2,416,871. However, the average compensation figures compared to last year are somewhat misleading due to newly appointed executives and incomplete compensation information. Hans C. Kobler, the president and CEO of ICx Technologies, was added to the table last year (see IBO 11/15/07). Mr. Peeler, also a new addition, was appointed CEO of Veeco Instruments last year (see IBO 7/15/07), replacing Mr. Braun, who is now chairman. Excluding these three executives, the average short-term compensation grew 10.8% to $757,010, and included a 29.0% increase in the average base salary to $420,171. However, the average bonus and nonequity incentive declined 5.8% to $336,839.

Don R. Kania, FEI president and CEO, received the largest increase in base salary, as his salary rose 172% to $570,625. He also received the largest nonequity bonus after being appointed CEO in 2006 (see IBO 8/15/06). The highest base salary went to Mr. Braun, who collected $650,000, while Mr. Peeler received the largest total compensation package of $5.9 million, which included a $1 million sign-on bonus, as well as a housing and car allowance of $34,458, which was categorized under Other compensation.

Laboratory Consumables/Equipment Index

The Laboratory Consumables/Equipment Index includes six executives from six companies. The average short-term compensation for executives in the Index jumped 29.3% to $1,268,795, and included a 5.1% increase in average base-salary to $621,975, as well as 66.1% growth in average bonus and nonequity incentive to $646,821. The total average compensation for the Index jumped over 158% to $7.0 million due to the fair value stock award granted to Mr. Lucier. He reported a 148% and 520% increase in total short- and long-term compensation to $3.0 million and $29 million, respectively. Excluding Mr. Lucier’s payout, the total average short-term compensation for the Index remained relatively flat at $366,685, while the average total compensation grew 20.0% to $2,633,584.

Diversified Instrumentation Index

The Diversified Instrumentation Index includes 11 executives from 6 companies. This Index reported the largest short-term compensation of $1.7 million among the Indexes, primarily due to large bonus and nonequity incentive payments and to the fact that these companies each have sales of more than $1 billion. Average short-term compensation for the Index grew 6.5% excluding Thomas P. Joyce, Jr., executive vice president of Danaher, whose 2006 salary information was not filed. Excluding Mr. Joyce, the average base salary improved 5.1% to $631,977, while the average bonus and nonequity incentive grew 7.3% to $1.1 million. The average long-term award totaled $1.4 million, a significant decline compared to fiscal 2006 due to Mr. Culp and Mr. Jellison’s awards last year. In fiscal 2007, Mr. Culp did not receive any long-term awards, but did record $115,920 in perks relating to the personal use of Danaher’s aircraft, as well as club memberships and a personal car.

The Index’s average total compensation fell 56.1% to $3.5 million. Excluding the compensation for Danaher’s executives, however, total average compensation dropped 11.7% to $3.7 million. Mr. Culp recorded the Index’s largest base salary and total short-term compensation, amounting to $1.1 million and $4.9 million, respectively. Christopher van Ingen, former senior vice president of Agilent Life Science (see IBO 8/31/07), received the largest increase in total short-term compensation, as it climbed 30.9% to $871,230. Mr. Jellison received the largest increases and had the largest total values for both long-term and total compensation, as they rose 9.8% and 6.7% to $7.4 million and $10.4 million, respectively.