Valeant share price meltdown wipes $1.5 billion from CEO's wealth
By Euan Rocha
TORONTO (Reuters) - The plunge in the stock price of Valeant Pharmaceuticals International Inc (VRX.TO: Quote) (VRX.N: Quote) has not only cost some of Wall Street's titans billions of dollars this week, it also wiped $1.5 billion from the personal wealth of its head Mike Pearson.
The former McKinsey & Co consultant, who has steered Valeant since 2008, does not currently draw any salary from the company. But company regulatory filings show that he is entitled to bonus awards of between $6 million and $10 million this year, should he and the company meet certain goals.
Valeant and its external advisors did not immediately returns calls and emails seeking comment on the hit Pearson has taken from the recent meltdown.
The largest portion of Pearson's wealth is tied up in equity. Based on the latest filings with the Securities and Exchange Commission and Canadian regulators, Pearson controls about 10.09 million shares, or a nearly 3 percent stake in the company.
The equity value of his stake stood at $2.66 billion when Valeant shares peaked at $263.70 on Aug. 5, 2015, on the New York Stock Exchange. The value of that stake had declined to about $1.11 billion as of the close of markets on Thursday.
The meltdown in Valeant's share price began a month ago when U.S. politicians and some law enforcement officials turned their sights on the company over its aggressive drug pricing tactics. Its problems multiplied this week after influential short-seller Citron Research issued a report accusing the drugmaker of padding its revenue line with fictitious sales.
Valeant has denied the allegations by Citron and its shares pared some of their losses in trading on Friday.
Valeant's more actively-traded New York-listed shares were up 8.6 percent at $119.23 in midday trading on Friday. Shares in the company are still down roughly 55 percent from their August peak. Continued...