Viehbacher's ouster, severance raise red flags for CEO candidates

Former Sanofi CEO Chris Viehbacher

So far, Sanofi ($SNY) has come up empty-handed in its hunt for a CEO to replace the ousted Chris Viehbacher. And the mystery surrounding his firing may have something to do with it.

At least three potential candidates have said they're not interested in the French drugmaker's top spot, and as Reuters' sources say, the murky details around Viehbacher's exit have would-be helmsmen wary of coming on board.

"The trouble with finding a successor hinges on the fact that we don't know the real reason he was fired, and because a lot of people are asking themselves questions about the subject," one source who has spoken to potential candidates told the news service.

Interim Sanofi CEO Serge Weinberg

Sanofi cut ties abruptly with Viehbacher last October, with Chairman Serge Weinberg citing subpar execution and a lack of communication with the company's board. But the move came as a shock to many industry-watchers and investors, and Viehbacher's lower-than-expected severance settlement, announced last week, has only stirred up new questions.

Under the terms of the agreement, Viehbacher is pocketing €4.44 million before bonus pay--a number that falls below the €5.92 million his contract suggested he'd net. But that so-called termination benefit was only set to apply if his ousting was both nonvoluntary and linked to a change in control or strategy, and Sanofi has said it wasn't the latter.

"The very low payoff he received only reinforces the idea that the reasons he was fired are not the ones that have been talked about," Reuters' source said--and that might be scaring off CEO candidates, too.

The skipper search--which started well before Sanofi let Viehbacher go, Reuters notes--has so far run up against a wall. The pharma giant is scouting for execs with ties to its home country, but both Takeda's incoming CEO and French native Christophe Weber and Paris-educated Smith & Nephew ($SNN) chief exec Olivier Bohuon have said they have no plans to leave their posts. Former Wyeth head Bernard Poussot joined rival Roche's ($RHHBY) board in December, a move that took him out of the running, and AstraZeneca ($AZN) top dog Pascal Soriot has played down his nationality by highlighting his Australian domicile.

And until Sanofi's hunt turns up some success, it'll be Weinberg--with no pharma experience to his name aside from his 5-year board stint--at the wheel.

"I think it is going to take time," a source told Reuters. "What we risk missing in the meantime is a strategic vision that you cannot have without a deep knowledge of the pharmaceuticals sector."

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