Balky Teva ($TEVA) shareholder Benny Landa has fallen in line behind the company's apparent choice for CEO, Erez Vigodman. As the Financial Times reports, Landa is once again circulating an email to fellow major shareholders--but this time to support the company's board rather than attack it.
Landa's support follows some debate about Vigodman's fitness for the job. Now at the helm of an Israeli agricultural chemical company, he previously ran the beverages company Strauss Group. Other than a stint on Teva's board, he has no experience in the drug business.
"As critical as I am of Teva's board, I think this time they got it right," Landa wrote (as quoted by the FT). "Certainly Vigodman does not bring pharma experience to the job, which is a pity. However … he knows what he doesn't know--and will be quick to learn."
Some analysts have also supported Vigodman for the job, saying he's adept at turnarounds--and a turnaround is exactly what Teva needs right now. With its cash cow drug Copaxone falling off patent in May, 18 months ahead of schedule, Teva is scrambling to cut costs and find new sources of revenue. Its previous CEO, Jeremy Levin, was recruited from Bristol-Myers Squibb ($BMY) to great hopes, but he left Teva late last year amid a conflict with the board of directors.
Which returns us to Landa's beefs with the Teva board. According to the FT, Landa tried to stop the group from pushing Levin out, and since then he has drummed up support among shareholders for a governance overhaul. He's proposing a smaller board, expanded rights for shareholders, and new directors with global pharma experience. And he says the board needs to keep its nose out of management's day-to-day business--which was a big issue in the fight that led to Levin's departure.
Landa now says that Teva's new vice-chairman, Amir Elstein, promised him that the board would propose changes in company governance. Landa also says he has met with Vigodman to show support as well as to highlight his proposals for board-level change. To Landa's mind, Vigodman won't be able to succeed without an overhauled board.
"This pharma-inexperienced CEO needs a board that can offer him pharma-seasoned advice," Landa wrote (as quoted by the FT). "A board that is independent and free of conflicts of interest. In other words, a very different board from today's."
- see the FT story (reg. req.)
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