Especially after the week Teva’s had, it may need to pay up—big time—to land a CEO that can help it turn its fortunes.
Now that the struggling drugmaker has recut its guidance, slashed its dividend and cautioned investors that it may breach its debt covenants, “they have to pay more than market,” analysts and investors told The Wall Street Journal.
“If you want a great CEO to save this sinking ship, you need to pay extra,” Eldad Tamir, head of investment house Tamir Fishman, said.
Bernstein analyst Ronny Gal chimed in on the topic last week, painting the new CEO’s job as less than appealing in a note to clients. “You’re taking a company in financial crisis with a lot of debt, which is no fun, and you’re going to have to cut costs dramatically, which no one likes to do,” he said.
Teva, though, may just be willing to fork over serious bucks in order to land a captain that can right the ship. For one, Celgene vet and chairman Sol Barer has said repeatedly that he’d do whatever it takes to bring in “the absolute best person from anywhere”—including waiving the requirement that the company’s CEO live in Israel.
Teva also reportedly offered AstraZeneca chief Pascal Soriot—who shot down the job after Teva’s board had already approved him for the post—double the paycheck of Teva predecessor Erez Vigodman, who in 2015 collected $5.7 million. And that’s not including the signing bonus Israeli newspaper Calcalist said Soriot was offered, which tallied between $15 million and $20 million.
And it’s already compensating interim head honcho Yitzhak Peterburg with a package worth $9.2 million, Haaretz notes–although that could be a problem in itself, as Peterburg may not have much incentive to hand over the job.
“A terrorist preventing the appointment of a permanent CEO is on the Teva board of directors,” Benny Landa, an outspoken activist who has criticized Teva for years, told the newspaper.
One thing’s for sure: Teva is going to do its best to revamp with or without the newcomer. Last week, Barer reiterated that the interim leadership had the board’s full confidence to plow ahead with a restructuring, which will claim a total of 7,000 jobs.
Meanwhile, Teva’s recent suffering has sparked attention from investment funds interested in paying cash for stakes worth up to 20%, Haaretz says. Former deal partner Allergan isn’t helping; it’s set to put its shares up for grab in the coming months, an event that’ll dent share prices further.
By Carly Helfand
Source: Fierce Pharma
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