UPDATE 1-Valeant's former CEO to receive $9 mln severance payment, other fees

Tue May 31, 2016 9:50am EDT
 
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(Adds severance payment details)

NEW YORK May 31 (Reuters) - Michael Pearson, the former chief executive officer of Valeant Pharmaceuticals International , will receive a $9 million severance payment and agreed to a consulting agreement worth hundreds of thousands of dollars, according to a document filed with regulators.

Pearson, who left Valeant on May 2 after a year in which it had drawn scrutiny for its sharp drug price increases, financial relationship with a specialty pharmacy and accounting practices, is also eligible for a pro-rated performance bonus for 2016, the separation agreement document said.

He can earn $83,333 a month this year as a consultant and next year, the company agreed to pay him $15,000 per month for consulting services, plus expenses. If Valeant severs the consulting services, Pearson will still receive the payments that would have been due, the document said.

After that time, Pearson could be paid $3,750 per day for any consulting services. He also promised to cooperate with the company on providing information related to government inquiries.

Pearson, who was replaced by former Perrigo CEO Joseph Papa, had led Valeant since 2008, driving its growth through serial acquisitions. Under his watch, the company's stock hit a high of $263.70 in August of 2015 and fell as low as $25.27 in April of 2016 due to doubts that the company could recover from its hefty debt load. It hit a year-low of $23.55 on May 12, after he left.

Valeant announced Pearson's departure in March as activist investor William Ackman took a position on the company's board of directors. (Reporting by Caroline Humer; Editing by Bill Trott and Alan Crosby)