Update (May 3 2014): I posted this some time last year and thought it would be worth updating in light of the that was just released before the annual shareholders meeting next week. The gist of the update is that Mike Pearson's stake in Valeant is now 10.6 million shares (or 3.2% of the company) which is worth a whopping 1.3B. Looks like this guy will be worth upwards of 5B by the time he moves on from the CEO position, which is mind boggling as far as CEO comp goes. That being said, it's hard to deny that he deserves it. The share price has gone from around 10 bucks to around 150 in just six years.
Anyway, hopefully that motivates some of you monkeys to attempt turning a failing company around.
J. Michael Pearson leftin 2008 to take the CEO position at Valeant Pharmaceutical. The terms were that he would need to buy $5MM worth of stock (it was in the gutter those days), and he would be paid 120,000 shares a year that would vest every three years if he managed a 15% per year shareholder return. If he could do 30% per year, it would 240,000 shares. 45% would mean 360,000 shares, and 60% would mean 480,000 shares.
Suffice it to say that he beat 60% per year since then. Fast forward to now and he has acquired 6.5 million shares that are fully vested, and he has another 2 million shares that will vest soon.
That means that his 8.5 million shares (at 90$ per share) is worth a metric fuckton of money.
So my question is: who the hell approved this compensation package? It doesn't sound like shareholders are complaining because of the blockbuster returns he's delivered (something like 800% over 5 years), but still. You would think over 100 million a year is excessive regardless of his performance..
What are your thoughts?