Valeant Pharmaceuticals Business Office V: Portion Pledges

Today is the solar daytime of Part IV you require to verify "facts" presented past times Valeant. Mr Pearson (the CEO) stated categorically that Valeant bought their debt downward quite speedily afterwards the Biovail merger. They did not.

So hither is a "fact" that I would similar clarified.

One of the nifty bull stories of Valeant is how the CEO, Mr J Michael Pearson, is a "hidden billionaire" who can't sell whatever of his stock until 2017.

Bill Ackman of Pershing Square, Valeant's partner inward its crusade to purchase Allergan, says:

“Now how is administration compensated? This is ane of the to a greater extent than odd as well as leveraged shareholder aligned compensation packages we've always seen. So the fashion it industrial plant for Mike as well as Howard, the CEO as well as the CFO of the company, if over the menses of their long-term incentive compensation grant, which are typically long-term periods, the company's portion price, the full provide does non equal or tumble out 15%, they acquire no long-term incentive compensation. If it's higher upward 15%, they acquire 100% of their PSUs vest. If it's higher upward 30% compounded, they acquire 200%. If it's 45% compounded, they acquire 300%. At 60%, they acquire 400% of their PSU grant. So that, again, focused on IRR on a long-term basis. And as well as thus it's non but that they acquire compensated, but they have stock inward the fellowship that they can't sell. Mike owns 10.6 meg shares. He's form of a hidden billionaire. He can't sell this stock until 2017. So nosotros similar that long-term alignment as well as that leveraged compensation for performance.” [Source: Transcript of Investor Meeting dated Apr 22nd, 2014, Page xvi - nonetheless y'all tin mail away uncovering an edited version such every bit the disceptation virtually bringing debt downward quite quickly) require to endure verified. Mr Ackman almost surely wrote his long presentation several days earlier the proxy was filed as well as in all likelihood did non larn virtually the pledge until afterwards he wrote his presentation.

Question 3: The compensation commission is "committed to reducing the score of pledging mostly at the Company". Which other executives select pledged shares, inward what quantity, as well as are those pledges properly disclosed inward world filings (especially inward filings regarding executive compensation)?

The proxy too discloses that the fellowship exclusively adopted an "anti-pledging policy" inward 2014. Moreover that "anti-pledging policy exempts existing margin as well as accounts as well as pledging accounts, which are permitted to popular off on until they expire, as well as allows the Board to brand farther exceptions to the policy when determined past times the Board to endure inward the best interests of the Company".

Some volition debate that I am beingness pedantic. H5N1 quarter of a billion dollars (the value of Mr Pearsons pledge) is pocket-size compared to the value that Mr Pearson has has created at Valeant - a fellowship worth over xl billion.

After all, what is a quarter of a billion dollars betwixt friends?





John