ALLEGAN – When news that Perrigo Co.’s then-chief executive officer, Joseph Papa, would be leaving to helm troubled Valeant Pharmaceuticals International Inc. first emerged, it stood to reason that Papa would be rewarded handsomely for the move.
But it’s now become clear just how handsomely: about $64.7 million this year, according to Bloomberg, with the vast majority of it in company stock and options. The estimate is based on Valeant’s closing share price Wednesday.
By contrast, outgoing Valeant CEO Michael Pearson could make up to $6 million this year: a $2 million base salary and a bonus of up to $4 million, an amount approved by the board April 21, according to Street Insider.
The bulk of Pearson’s bonus — 75 percent — is contingent on “the achievement of certain corporate performance metrics,” with the remaining quarter relying on Pearson helping Papa’s transition.
Papa’s compensation begins with a base salary of $1.5 million, with the incoming CEO eligible for a bonus of up to $2.25 million a year, according to Street Insider.
Like Pearson, 75 percent of Papa’s bonus opportunity is based on meeting “corporate financial metrics,” with the last 25 percent based on meeting “strategic metrics determined by the talent and compensation committee of the board… after consultation with Mr. Papa.”
The employment agreement also includes a one-time payment of $8 million for the Perrigo equity Papa gave up by leaving.
Then there’s the various stock and stock options awards: 373,367 restricted share units, plus $10 million in stock options, plus 933,416 in performance-based restricted stock units.
This article was published in Market Watch.
