Former Allergan CEO Pyott Sees $534M Cash Payday After Stock Sale

Former Allergan CEO Pyott Sees $534M Cash Payday After Stock Sale
April 1, 2015
By Riley McDermid, BioSpace.com Breaking News Sr. Editor

Ousted former Allergan Inc. chief executive David Pyott has converted equity awards to cash totaling $534 million after the sale of the company to Actavis plc , a new filing with the U.S. Securities and Exchange Commission showed this week.

Pyott had owned close to 3 million stock options and more than 285,000 shares and restricted shares of Allergan, which he swapped out for $534 million in cash on March 17, the day the deal closed.

Pyott had been with Irvine, Calif.-based Allergan, the maker of Botox, since 1998, but is perhaps best known for the infamous $34,955,619 “golden parachute” provided by the new management in return for walking away.

Actavis Plc (ACT), which last fall agreed to buy Allergan Inc. (AGN) for a deal valued at $70.5 billion, conducted a wholesale cleanse of its upper ranks after the takeover, saying it will replace Allergan’s current upper management with its own internal choices. As part of that sweep, Pyott was not even allowed to remain on the newly merged company’s board.

But it appears he has now landed on his feet: Pyott found a new home at Dutch consumer electronics company Koninklijke Philips Electronics NV, which said Thursday it is proposing to appoint him a as a new member of its Supervisory Board. Pyott is also a director of Avery Dennison Corporation and its lead independent director.

"Mr. Pyott has gathered in-depth knowledge of the pharmaceutical and healthcare industries, in North America as well as globally,” said Jeroen van der Veer, chairman of Philips' Supervisory Board. “His expertise will be invaluable in view of Philips' transition into a company focused on HealthTech."

As for Actavis, the company said that Brent Saunders will continue to lead Actavis as CEO and president and a member of the board of directors. Paul Bisaro will remain executive chairman of the newly-combined company’s Board of Directors. The sole exception to the purge is Douglas Ingram, Allergan’s president and former head of its Europe, Africa and Middle East unit, who will stay on as an adviser to Saunders.

"We are committed to realizing the full potential of the historic combination of Actavis and Allergan beginning on Day 1, and announcing the proposed leadership of the combined company is a critical step in achieving that objective," said Saunders in a statement in December. "The management structure we are announcing today will ensure that we capitalize on the value of Allergan's world-renowned businesses and the proven track record of the leaders of its powerful and critically important franchises.”

New Jersey-based Actavis has its legal address in Dublin and the deal will make Actavis one of the world’s 10 biggest drugmakers, including exclusive rights to blockbuster cosmetic drug Botox.

"At close, this combined leadership will ensure that the new company capitalizes on our expanded global commercial footprint, maintains our continued dominance as a world leader in generics and that we elevate our commitment to brand innovation and development by making brand R&D directly report to the CEO level,” said Saunders.

The deal closed officially on March 17 and will produce three units, International Brands, Branded Pharma and Allergan Medical. Actavis said in December it will invest $1 billion in research and development under a combined department led by Actavis’s C. David Nicholson.

"Although we are acting rapidly in announcing these appointments, we are making them following extensive discussions with [Pyott] and his executive leadership team,” he said. “We believe that by announcing the proposed structure of the combined organization our shareholders, customers and employee teams will better appreciate our commitment to create the most dynamic company in Growth Pharma and will share our confidence in seamless execution of this combination beginning on Day 1.”

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