Former Valeant Pharmaceuticals CEO Michael Pearson will receive a $9 million severance payment as part of a separation agreement, the company announced on May 31 in an 8-K filing with the United States Securities and Exchange Commission.
The agreement stated that Pearson would receive the payment within 60 days of his termination date, which was May 2. Pearson will also serve as a consultant for Valeant through at least Dec. 31, 2017. The parties can then renew the consulting agreement on a monthly basis. He will receive $83,333 for each month this year and $15,000 for each month in 2017.
Pearson is also eligible for a pro-rated annual bonus for fiscal year 2016. He will also receive health, medical, dental and vision coverage and office space through May 2, 2018.
Valeant announced on March 21 that Pearson would leave the company but continue to serve as CEO until a replacement was found. The company hired Joseph C. Papa as CEO on April 25. Papa was formerly the CEO of Perrigo Company plc.
Since last year, Valeant has received criticism for increasing the list prices of two heart drugs by 212 percent and 525 percent. In May, the company announced that it would decrease the price of those drugs by up to 40 percent for hospitals and other payers.