Valeant Ex-CEO Pearson Sues Company Over Unpaid Stock
March 27 2017 - 6:23PM
Dow Jones News
By Jacquie McNish
Michael Pearson, former chief executive of Valeant
Pharmaceuticals International Inc., is suing the embattled
drugmaker for refusing to pay him more than 3 million company
shares that he said he is owed.
In a lawsuit filed Monday in the U.S. District Court of New
Jersey, Mr. Pearson said Valeant breached his contract by not
paying him 580,676 shares and 2.5 million performance shares that
were due last November under the terms of his separation
agreement.
Based on Valeant's stock price of $10.81 at the close of trading
Monday, the unpaid shares have a market value of about $33 million.
In November, the stock price was above $15 for much of the
month.
The complaint said Valeant also owes Mr. Pearson $180,000 in
unpaid consulting fees.
A spokeswoman for Valeant declined to comment Monday. Last week,
the spokeswoman said the company had "determined not to make
further payments due to the circumstances that Valeant finds itself
in at this time."
Mr. Pearson was ousted as Valeant's CEO last May, and he
remained as a consultant until January this year.
Mr. Pearson's complaint said his lawyers requested payment of
the overdue shares in January, but the company's executive vice
president and general counsel Christina Ackermann said in a letter
that the board decided against the payment.
Mr. Pearson was richly rewarded at Valeant through a
compensation plan that tied the bulk of his pay to targeted
increases in the company's stock price. Stoked by a steady campaign
of takeovers, Valeant's stock price soared under Mr. Pearson's
leadership, hitting an all-time high of $262.52 in 2015.
That year Mr. Pearson was paid $141.6 million, largely in stock
awards. His pay was valued at $72.5 million in 2016, largely
through stock awards and a $10.4 million severance payment.
Valeant's stock price has plunged 96% since the 2015 high, after
the company became engulfed in controversy over drug-price
increases, accounting practices and its undisclosed business with a
mail-order pharmacy. The U.S. attorney's office in Manhattan last
year alleged in a criminal complaint that a former Valeant
executive and an official with Philidor Rx Services LLC enriched
each other through a multimillion-dollar fraud and kickback to
funnel Valeant business to Philidor. The Valeant and Philidor
executives have denied the charges.
Write to Jacquie McNish at Jacquie.McNish@wsj.com
(END) Dow Jones Newswires
March 27, 2017 18:08 ET (22:08 GMT)
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