Valeant awarded CEO Papa $62.7M last year despite missing financial targets

Valeant CEO Joseph Papa collected $62.7 million in 2016 pay.

Valeant is shelling out a hefty sum on its chief exec’s pay package for a pharma company—let alone a pharma company that’s struggling under a mountain of debt.

CEO Joseph Papa, who took the helm of the foundering company last April, raked in $62.7 million in pay for 2016. And while most of it—$42 million—came in the form of stock awards, Papa also netted a $9.1 million bonus on top of his $980,769 base salary.

Considering that Valeant brought Papa on to try to turn sales around, pay down debt and improve the company’s badly battered reputation, not a whole lot has changed over the course of his tenure. Late last year, feds hit a former company exec with fraud and kickback charges as part of the ever-mysterious Philidor saga. Key meds still can’t find their footing, and new obstacles—including rep turnover—are raising doubts that that’ll change any time soon. And while Papa has orchestrated a couple of small asset sales, talks fell through last year for a whopper Takeda deal that would have brought in $10 billion in exchange for Valeant’s Salix unit.

As Valeant explained in its proxy filing, though, only $1.1 million of Papa’s bonus was a reward for his individual performance. While “the financial goals that were established at the beginning of the year were not sufficiently achieved to result in a payout” of Papa’s annual cash incentives, the company tossed him 50% to tip its cap to the “significance and quality” of his contributions.

“The board is very supportive of Mr. Papa’s efforts to date and is confident in his abilities and those of his team to lead us through our transformation,” Valeant said.

And the other $8 million in Papa’s bonus pay? That was a thank-you for taking the job in the first place—one that totaled almost half the sum he made at former company Perrigo the year prior.

Papa wasn’t the only exec Valeant wooed with a mammoth welcome gift, though. CFO and Zoetis vet Paul Herendeen’s was even larger, hitting $10 million.

The numbers add up even more quickly when factoring in the compensation Valeant forked over to its departed execs last year. The Canadian drugmaker paid out $10.5 million to former CEO J. Michael Pearson—and that’s just in severance pay. There was also the nearly $500,000 it awarded him in consulting fees after he handed over the reins. And former EVP and general counsel Robert Chai-Onn received $3.3 million in severance pay, too.

Shareholders saw some good in the news, pushing shares up as much as 2.8% on the report.