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Teva execs feel the pinch, after pay halved

Published on 11/01/18 at 11:09am

Teva’s current crisis is built upon problems that run deep into the company, after numerous acquisitions left it bloated and then a weakened generics market left it struggling to pay down debt.

Since Kare Shultz arrived at the company, he’s immediately begin to work on cutting away some of excess fat on the company – with thousands of job layoffs planned and plant closures predicted.

The cuts have not been received well in Israel, where a number of strikes have been called to protest the moves to cut staff in the company’s home.

In a move that seems designed to go some way to appeasing workers and to foster a ‘we’re all in this together’ environment, the board of directors have taken a 50% pay cut, a board member revealed.

Teva directors currently earn $160,000 annually and also receive $10,000 to $20,000 in bonuses for sitting on committees, according to Globes. For workers who are left entirely without a job, the news that company executives may only walk away with $100,000 annually may not come as much comfort.

However, Shultz seems to have taken the lead at the company in making a number of hard decisions, which have been taken to make statements about the future of the business. Standing firm on plant closures in Israel when the public and government were placing pressure on the drugmaker was such a decision.

At the JP Morgan Healthcare Conference, Shultz was candid about where he felt the company had run into trouble – noting that the company had built up a network of 80 manufacturing facilities, through acquisitions, and suggested that if the company had grown organically it would need only two to four API sites and 12 functional manufacturing sites.

As a result, the company will be looking to shed 20 to 25 manufacturing sites over the course of the next two years, with the overarching aim of clawing back $3 billion in reduces costs.

Shultz’s tough talk seems to have won over some investors, with shares up by close to 1.67% after his presentation at JP Morgan.

Ben Hargreaves

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