Another pharma buyout, another set of golden parachutes. Now that Teva Pharmaceutical Industries has agreed to buy Cephalon for $6.8 billion, that company's top execs may be eligible for big payouts. CEO Kevin Buchi, for instance, could get $14.6 million, including $4.4 million in cash.
Cephalon disclosed to the SEC that under severance deals with top management, top execs will be in line for payments if their contracts end early because of the buyout. In addition to Buchi, four other execs would get $5.9 million to $7.9 million each. CFO Wilco Groenhuysen, for example, will be eligible for $5.9 million, including more than $2 million in cash, while CVP and Chief Medical Officer Lesley Russell Cooper is up for $7.9 million, $2.7 million in cash.
And then there's the value of these top managers' Cephalon stock. Their severance deals include payments for unvested options. But their vested options come on top of that. Buchi has more than $6 million coming for his vested options.
The filing also contains some details about Cephalon's sale; for instance, before the deal came out, the company was in talks with three drugmakers and two financial institutions. Valeant Pharmaceuticals was one of Cephalon's suitors, and it eventually lodged a hostile bid of $73 per share. A dinner meeting between Buchi and Teva Americas chief William Martin in March got things rolling between those two companies.