Former Valeant CEO Michael Pearson sues over $30m unpaid shares

pharmafile | March 28, 2017 | News story | Manufacturing and Production, Sales and Marketing Michael Pearson, Valeant 

Ex-Valeant CEO Michael Pearson is suing his former company over its failure to deliver three million shares he claims he is owed as part of his separation agreement. Based on the firm’s share price on Monday, these shares amount to a total of $32.4 million.

According to the lawsuit filed by Pearson in the US District Court of New Jersey, Valeant is accused of breaching contract by withholding 2.5 million performance shares and 580,676 additional shares due in November, alongside $180,000 in consultation fees.

Pearson left the company in May last year, announcing his departure in March following controversies raised over its drug pricing policy and business practices. The company was hit by a US Attorney’s Office investigation in August, and Pearson himself was indicted for accounting fraud alongside CFO Howard Schiller later in November

“Despite Mr Pearson’s attempts to resolve this dispute outside of the courts, and to his severe detriment, Valeant has refused to deliver the shares and to meet certain of its other remaining obligations,” the suit reads.

However, the company has responded arguing that such a huge payment to Pearson is simply not fair or feasible, considering the situation faced by much of its workforce:

“Valeant believes it would be inappropriate or inequitable in the current environment for Mr. Pearson to receive additional compensation – to the tune of millions of dollars – at a time when countless other Valeant employees have been asked to sacrifice for the good of the company and its shareholders,” it claimed.

Despite the dispute, Valeant has awarded Pearson a $9 million severance payment, including insurance coverage, an administrative assistant and office space.

Matt Fellows

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