(Allergan Inc. Chief Executive Officer David Pyott could receive about $100 million if he’s terminated following Actavis Plc’s acquisition of the Botox maker.
The payment would include about $89 million in cash and stock he’d receive in exchange for equity awards that haven’t yet vested, according to a Feb. 19 filing from Irvine, California-based Allergan. Pyott would also receive $9.91 million in cash, as well as $2 million for accrued pension and health benefits for three years, according to the filing.
Actavis said in November it would purchase Allergan for about $65 billion — last year’s largest announced pharmaceutical deal — to become one of the world’s 10 biggest companies in the industry. Pyott’s payout would trigger if Dublin-based Actavis, which keeps its operational headquarters in Parsippany, New Jersey, elects to terminate him.
Actavis said in a Dec. 16 statement that it plans to replace most of Allergan’s current executives with its own. The company didn’t say what role Pyott would have. The deal is scheduled to be completed this year. Actavis CEO Brent Saunders will lead the combined company, according to a statement at the time of the deal.
“It might seem like an outlandish sum to the public eye, but in CEO-land, it’s a fairly standard arrangement,” said Erik Gordon, a professor at the University of Michigan’s Ross School of Business. “Given the stakes in these takeovers, cashing the guy out from what he’s already earned, that’s an easy pill for the board to swallow.”
Companies are paying out this type money to people who are not producing or taking the business to the brink of bankruptcy. They even to give bonuses with Guvment bailout money. A common practice, but everyone has bought into the BIG BAD UNIONS are the cause all the time.