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Ousted pharma boss gets $9m severance

Do Not UseDo Not Use 31/05/2016
Michael Pearson © Reuters Michael Pearson

The former head of embroiled drugmaker Valeant will receive $9m (£6.2m) in severance payment along with thousands of dollars in consulting fees.

Michael Pearson, stepped down as Valeant's chief executive on 2 May, as the company's share price fell 80% and regulatory investigations mounted.

He will continue to work with the company as a consultant and is eligible to earn $83,333 a month in 2016.

In April, he testified before the Senate on Valeant's pricing methods.

The company was criticised for buying older drugs and raising the prices without investing in research and development of new drugs- a strategy championed by Mr Pearson.

During his Senate testimony Mr Pearson said he "regrets" the strategy.

His ousting came after Valeant's share price fell 80% in a year and as part of a reorganisation of the company's management.

New Valeant

Mr Pearson was replaced by former Perrigo head Joseph Papa. Activist investor Bill Ackman - once a supporter of Mr Pearson - also joined the board.

Regulatory documents filed by the company outline a potential multi-year consulting contract with Mr Pearson.

He will be eligible to earn $15,000 per month plus expenses in 2017 and $3,750 per day for consulting after that.

Mr Pearson is also eligible for a performance bonus for 2016.

In addition to consulting, Mr Pearson has also agreed to cooperate with any government investigations into the company.

In April, Valeant issued a statement requesting his cooperation with the Senate investigation.

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