Purdue Pharma paid CEO $9M in year before bankruptcy
OxyContin maker Purdue Pharma paid its CEO $9 million and its board chairman nearly $4 million in the 12 months before the company’s bankruptcy filing last month, according to recently filed financial documents.
Five other board members overseeing the private company were paid a combined $3.7 million over that span.
Purdue, a privately held company that usually does not disclose detailed financial information, had to make the information public as a part of its bankruptcy proceedings.
Charles Elson, director of the Weinberg Center for Corporate Governance at the University of Delaware, said it’s hard to compare CEO Craig Landau’s pay package to other executives. But the money paid to Steve Miller, a corporate turnaround specialist who was brought in to lead Purdue’s board of directors last year, seems excessive, he said.
“In a public company, that would be a rather extraordinary sum to pay a non-exec chair,” Elson said, while noting that Purdue can pay whatever it wants.
“In a private company, it’s private and it’s between them,” he said.
In a statement Wednesday, Purdue said its employees have highly specialized skills that would be hard to replace.
“During the past several years, employees have had to work under very challenging conditions as litigation has accelerated and the company has been targeted by the plaintiffs in the media,” the company said. “Throughout this period, Purdue’s employees and executives have maintained their professionalism and continued to develop, manufacture and provide safe and effective, FDA-approved medicines to meet patients’ needs.”
The court documents say pay for the company’s executives included salary, incentives, retirement plan contributions and an auto allowance, among other things.
They were filed late Tuesday in U.S. Bankruptcy Court in White Plains, New York. Purdue sought bankruptcy protection in September in its effort to settle nearly 2,700 lawsuits that seek to hold the company accountable for its role in the nation’s opioid epidemic.
The company’s proposed settlement with state and local governments could be worth up to $12 billion over time.
The documents don’t shed any new light on how much members of the Sackler family who own Purdue have profited from the company. They show family members receiving some expense reimbursements and other payments of up to a few thousand dollars, but no major distributions to them in the 12 months before the bankruptcy filing. A deposition filed in court previously cited payments to the family of $12 billion to $13 billion.
The biggest questions surrounding Purdue’s settlement efforts involve the Sacklers. The company is asking a judge to pause hundreds of lawsuits filed against members of the family so they can contribute at least $3 billion to the settlement.
Several state and local governments oppose that, arguing they should be allowed to continue their lawsuits against the family. Several government attorneys have argued that family members should pay more than they have pledged so far. A hearing on the matter is scheduled for next week.
The company, which reported having nearly $1.4 billion in cash, has previously said it was spending about $5 million a week on lawyers and other costs associated with litigation. This week’s filings back that up, showing law firms being paid millions.
The filings are for more than 20 Purdue-related companies. Most don’t show executive pay. But four executives at Purdue subsidiaries were shown receiving $1.5 million to $3 million each.
Mulvihill reported from Cherry Hill, New Jersey, and Murphy reported from Indianapolis.