Parting is such sweet sorrow.
It’s especially sorrowful if you’re leaving a company after overseeing the collapse of its stock by almost 90% over the past year.
It’s especially sweet, though, if you’re going to get paid $83,333 a month for the rest of the year to “consult” for the company.
And so it is for Michael Pearson, the former CEO of Valeant Pharmaceuticals. His separation agreement from the company was released on Tuesday, after he was ousted from his position last month. He was replaced with former Perrigo CEO Joe Papa.
Here are a few more things Pearson, whose consulting period for the company lasts about two years, is entitled to:
- A $9 million severance.
- “An annual bonus in respect of the 2016 fiscal year pro-rated to reflect the portion of the 2016 fiscal year elapsed prior to the Termination Date, based on (i) 150%…”
- Full benefits for himself and his dependents for two years.
- Office space for two years.
- “In exchange for the Services performed here under, Valeant agrees to pay Mr. Pearson a fee of (i) $83,333 for each month (pro-rated for partial months) that Services are performed through the end of 2016, and (ii) $15,000 for each month (pro-rated for partial months) that Services are performed after 2016 and during the Consulting Period. ”
- Valeant will also pay for any travel expenses incurred by Mr. Pearson related to the company during his consulting period.
All of this is key, but likely the most important part of this agreement to Valeant is this part right here [emphasis ours]:
. Mr. Pearson agrees not to make written or oral statements about Valeant, its subsidiaries or affiliates, or its directors, executive officers or non-executive officer employees that are negative or disparaging. Valeant shall instruct its directors and executive officers not to make written or oral statements about Mr. Pearson that are negative or disparaging. Notwithstanding the forgoing, nothing in this Agreement shall preclude (a) either Party (and, in the case of Valeant, its directors, executive officers, and non-executive officer employees) from communicating or testifying truthfully to the extent required by law to any federal, state, provincial or local governmental agency or in response to a subpoena to testify issued by a court of competent jurisdiction, (b) Mr. Pearson, if after consulting with Valeant it is determined in good faith by Mr. Pearson that a false or misleading statement concerning Mr. Pearson has been made by a director, executive officer or non-executive officer employee, from making statements specifically to rebut any such false or misleading statements made by such director, officer or employee, or (c) Valeant’s directors, executive officers or non-executive officer employees, if after consulting with Mr. Pearson it is determined in good faith by such director, officer or employee that a false or misleading statement concerning such director, officer or employee has been made by Mr. Pearson, from making statements specifically to rebut any such false or misleading statements made by Mr. Pearson.
Once a Wall Street darling, Valeant fell from grace in October after government scrutiny over its drug price hikes combined with accusations of malfeasance from a short seller to send its stock plummeting. As investors headed for the exits, more about Valeant’s questionable practices under Pearson’s watch — including the creation of a secret specialty pharmacy called Philidor — came to the fore.
The rest is the stuff that multi-million dollar separation agreements are made of.
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