What happened

Amarin (NASDAQ:AMRN) enjoyed a 7.7% ride skyward on Monday. This was on the back of a regulatory document filed after market hours on Friday detailing some new incentives for top management.

So what

Amarin disclosed in the document that it has drafted and implemented an Executive Severance and Change of Control Plan. This is a set of measures beefing up severance payments -- in addition to other benefits -- for the biotech's top executives.

Piggy bank with stethoscope.

Image source: Getty Images.

In the event of termination of employment "without 'Cause' or by a participant for 'Good Reason'," in Amarin's words, the company's CEO (currently John Thero) would still receive their base salary for 24 months. Among other perks, they would also receive continued enrollment in Amarin's group healthcare plan and be allowed to vest outstanding equity awards.

Meanwhile, Amarin's executive, senior vice presidents, and vice presidents will also be granted comparable severance arrangements, albeit at more modest levels than the CEO's arrangement.

Those perks would be guaranteed for shorter periods with other forms of termination and in other circumstances.

Now what

While the company has lately suffered patent setbacks with Vascepa, its star drug for the treatment of cardiovascular disease, the medicine has vast potential outside of the U.S., especially in the European Union where an estimated 85 million people suffer from this condition.

Keeping top management comfortable and secure should help with C-suite morale and thus overall company stability. It might also serve as a sort of poison pill, or at least a disincentive, to a potential acquirer.

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