Amgen Inc (AMGN.O), the world's largest biotechnology company, said Chief Executive Officer Kevin Sharer will retire next May, and be replaced by Chief Operating Officer Bob Bradway.
Sharer, 63, will retire as chairman at the end of 2012. He has been Amgen's CEO since 2000, over a period in which the company's stock price has been largely flat.
He did not create a lot of shareholder value in his tenure. Whether that was his fault or not is a question, said Cowen & Co analyst Eric Schmidt.
Shares of the Thousand Oaks, California-based company have suffered after safety concerns were raised several years ago about the safety of its flagship anemia drugs, Epogen and Aranesp.
Schmidt said it was a bit surprising that Sharer did not stay in his post through the usual retirement age of 65.
Given the lack of appreciation in Amgen's shares, the CEO's compensation package has also drawn fire from some investors.
ISS Proxy Advisory Services said in a report earlier this year that above-median bench-marking and a 53 percent increase in CEO pay in 2010 have resulted in a significant misalignment between pay and performance.
Sharer told Reuters in April that a management transition at Amgen was likely in the next few years.
The drugmaker also announced on Thursday a hike in its quarterly dividend of nearly 30 percent.
The company, which began paying a dividend just last year, announced a first-quarter payment of 36 cents a share to shareholders of record as of February 15, 2012. The previous quarterly dividend payment was 28 cents a share.
Amgen, which recently bought back nearly 10 percent of its outstanding shares, has said it is committed to returning at least 60 percent of its earnings to investors. The company has also said it intends to meaningfully increase the dividend over time.
Bradway will become CEO on May 23, 2012, and will also become chairman of the board at the end of next year, when Sharer retires from that position, the company said in a statement on Thursday.
Amgen said Roger Perlmutter, 59, will retire as executive vice president of research and development next February, remaining as a consultant through February 2013.
Chief Medical Officer Sean Harper was named to replace Perlmutter.
Shares of Amgen, which rose 1.7 percent to close at $58.62 in regular trading, were little changed at $58.80 after hours.