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MARKET INTEL by PharmaCompass
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By PharmaCompass
2019-03-28
Impressions: 96 Article
Hedge fund Appaloosa LP has been putting pressure on Allergan to split the roles of its chairman and CEO. Both the positions are currently held by CEO Brent Saunders. Appaloosa has also suggested the Botox maker consider a sale or breakup of the company.
On March 22, Allergan disclosed in a US Securities and Exchange Commission filing that it has agreed to split the roles of the CEO and chairman in the next leadership transition, in accordance with Appaloosa’s request.
The company also stated that it had slashed the pay handed out to Saunders, to US$ 6.6 million for 2018, which is less than one-fourth of the US$ 32.8 million he received in 2017.
However, it seems that Appaloosa is not impressed. In a statement, Appaloosa said: “Typical of this Board, Allergan has done everything except what needs to be done to fix the company. Unless the Board intends to make a CEO transition in the very near-term, these measures are no more than a meaningless series of gestures intended to preserve the current system of lax oversight and further entrench management.”
The company said splitting the roles now, as hedge fund Appaloosa has requested, “could impede the board’s effectiveness by creating a crisis of confidence in Saunders at a time when leadership stability and effectiveness is critical.”
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