Ousted Sanofi CEO Pockets $5 Million+ Severance Package
January 23, 2015
By Mark Terry, BioSpace.com Breaking News Staff
Paris-based Sanofi announced yesterday that it had agreed to a severance package for ex-CEO Chris Viehbacher worth about $5 million. Viehbacher will receive a payment of €2.96 million, roughly equivalent to his yearly compensation. In addition, the company will pay him €246,750 per month until the end of June, totaling €1.48 million.
This is less than Viehbacher’s original employment agreement called for. Under that contract he was entitled to €5.92 million. Under the new agreement Viehbacher agreed not to hire away any Sanofi employees for 18 months, and signed a 24-month confidentiality agreement. A non-compete clause also runs until June 30, 2015.
Viehbacher was fired by the Sanofi board on Oct. 29, 2014 over differences in strategy. Primarily the differences revolved around Viehbacher’s plan to sell the company’s portfolio of mature drugs without consulting with the board.
The portfolio is valued at about $7.9 billion, and includes 200 drugs such as blood thinner Plavix and epilepsy medication Dapekine. Many of the patents in the portfolio will terminate in the next several years. In addition, cuts in the European healthcare budget was expected to eat into the portfolio’s sales by as much as 40 percent over the next ten years.
Viehbacher also raised the ire of the board by moving to the U.S. for family reasons, spending only about three months out of the year in France. Despite this, he was popular with shareholders because under his tenure company share prices doubled. He also oversaw the acquisition of Genzyme Corporation.
Currently Chairman of the Board Serge Weinberg is acting as interim chief executive officer. There has been a lot of speculation about who might take over the top spot. Christophe Weber, chief operating officer of Japan-based Takeda Pharmaceuticals , had been ooffered the position, but declined.
Other possible candidates have been Pascal Soriot, CEO of AstraZeneca PLC , who also reportedly declined the position, Oliver Bohuon, of medical device maker Smith & Nephew Plc, Eric Cornut, chief ethics officer of Novartis AG (NVS) and Olivier Brandicourt, director of healthcare for Bayer AG .
In Sanofi’s 2013 annual report it indicated that if he was removed from office, Viehbacher was entitled to two years pay. Calculations would be based on the fixed part of his salary at the time of dismissal and the most recently received variable pay award.
In 2014 Viehbacher’s fixed pay was 1.26 million euros. His variable pay for 2013 was 1.70 million euros, which made for a total amount of 5.92 million euros.
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