Allergan CEO Saunders lines up for $39M parachute after AbbVie buy

Allergan CEO Brent Saunders’ meteoric rise through pharma’s chief exec ranks is paying off, and in a big way. If he’s let go after AbbVie’s $63 billion takeover of the California company goes through, Saunders will net a cool $38.7 million.

According to a regulatory filing, the Allergan skipper will pocket $14.9 million in cash as part of his golden parachute. That’s on top of $23.6 million in equity, the majority of which is made up of stock awards that pay off based on performance.

That, of course, doesn’t include the 167,909 shares of Allergan that Saunders currently holds. At AbbVie’s takeover price of $188 per share, those are worth more than $31 million.

The icing on the cake for Saunders: $154,037 in other benefits. $54,037 will go toward continuing his current medical, dental and vision benefits for 36 months after his exit. The other $100,000 is what Allergan calls “outplacement benefits,” which includes two years of secretarial support.

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All in all, Saunders will be rewarded handsomely in a year that, for Allergan, was far from stellar. Its shares continued to languish. It nixed a sale of its women’s health unit after so-called blockbuster candidate Esmya failed to win FDA approval. Key depression candidate rapastinel failed three phase 3 studies, prompting a $2.5 billion write-down.

And through it all, the company’s leaders resisted the major change demanded by activist investors, instead insisting Saunders should hang on to both his chairman and CEO titles for the time being.

But then again, Allergan has a history of forking over huge paychecks for suboptimal performances. In 2017, which featured the company’s ill-fated tribal licensing deal meant to shield Restasis from generics—as well as job cuts and more bottom-feeding for shares—Saunders received a $32.8 million pay package, an eightfold increase over 2016.

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While Saunders likely isn't bemoaning his Allergan payout, he's not quite where he might have been had Pfizer's proposed $160 billion buyout of the Dublin drugmaker not succumbed in 2016 under new U.S. tax rules. After heading up Forest Labs and then its buyer Actavis, Saunders took the helm of the combined Allergan-Actavis after the two merged. Many assumed that a Pfizer Allergan buy would put Saunders in line to succeed Pfizer's Ian Read—a job that ultimately went to Pfizer COO Albert Bourla