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Judge overseeing Purdue Pharma bankruptcy approves $1.3 million bonus for CEO

Published on 27/01/20 at 09:49am

Purdue Pharma’s CEO Craig Landau can receive a $1.3 million bonus, ruled a judge.

Judge Robert Drain said the company was justified in giving Landau the bonus as it would keep him as CEO of the company.

Connecticut and the 23 other non-consenting states who have not agreed to settlement terms with Purdue, had strongly opposed the bonus.

This decision followed Drain’s approval of a $35 million bonus package on 4 December, but he did not rule on Landau’s performance bonus for the year. This was to give Purdue and non-consenting states the time to broker a deal which they were unable to do.

In the hearing, Drain said: “If you cannot get capable people to perform this type of work without paying that amount of money or more — or alternatively, the replacement cost is greater than what is being proposed — it’s really not in the interests of the creditors and not appropriate to say, nevertheless, they (Purdue) should take a ‘haircut’ because it seems like a lot of money.”

Purdue Pharma is at the heart of the opioid crisis. They face 2,700 lawsuits for practices like its deceptive OxyContin marketing. Landau is alleged to have been involved, with the state of Massachusetts accussing him of being directly involved in this deception. Landau has agreed that the court could reconsider the bonus if he was found personally liable in pending cases against Purdue.

Connecticut Attorney General William Tong, in response to the ruling, said: “I'm disappointed by this decision and certainly would have preferred the money be spent on opioid recovery, treatment and prevention. But this is one step in a long process, and we will continue to fight to ensure that Purdue and the Sacklers cannot hide behind this bankruptcy proceeding to evade accountability.”

In December, eleven US Senate Democrats voiced their opposition to Landau’s bonus, with Presidential candidates Bernie Sanders, Elizabeth Warren and Amy Klobuchar being among them. They outlined their position in a letter which said: “Instead of taking this opportunity to adjust its priorities, Purdue is fighting to maintain an incentive structure that could result in the unwarranted prescription and irresponsible distribution of drugs. By maintaining the aggressive incentive plan for Mr. Landau, the board is showing it does not recognize the role the incentive program played in accelerating the opioid crisis into a national tragedy.”

Conor Kavanagh

 

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