Valeant shells out $10.8M in bonuses to keep three top execs

Valeant building

It’s a good time to be a Valeant Pharmaceuticals executive, provided you can stand the heat. The company’s top leadership will score millions in retention bonuses under new agreements disclosed in securities filings late Monday.

And if they leave the company for good reason--or are fired for no good reason--within a year, they’ll collect twice the severance pay they’d have received before.

“We know that these continue to be challenging times for our company,” CEO Joseph Papa wrote to his top managers to set forth the terms of their retention deals. “We are appreciative of your continued dedication and commitment to the organization,” the letter continued.

Group chairmen Ari Kellen and Anne Whitaker, along with CFO Robert Rosiello, each rate cash bonuses of $1 million if they stay in their posts till year’s end. And last week, each collected an equity grant that will vest over the next 18 months.

The largest equity grant, $3.8 million, went to Kellen, who heads up Valeant’s dermatology unit, its Bausch & Lomb eye-care subsidiary, and its Latin American business. Of the three, he’s been with Valeant the longest, if only in relative terms; he joined Valeant in January 2014.

Rosiello, who replaced former Valeant CFO Howard Schiller last July, collected an equity grant worth $2.8 million. Whitaker, who also joined Valeant last year, won a $1.25 million grant.

The grants came in the form of restricted stock units that start vesting in 6 months and fully vest in 18.

The new severance pay deals qualify all three for twice their previous sum. Before, the execs would have received a year’s worth of salary and bonus if they quit for a good reason, or were fired without cause. Now, it’s twice that.

Other Valeant workers obviously won’t qualify for similar payoffs, as Papa noted in the agreement letter. “As you might appreciate, while we value the service of all Valeant employees, this retention opportunity is being extended to a limited number of key employees, so please keep this letter confidential,” the letter states.

- see the Valeant SEC filing