Teva to lose CFO, with turnaround still under construction
Two years ago, Kåre Schultz took on the gargantuan challenge of fixing a financially troubled, debt-laden Teva with a sparse pipeline. He responded by initiating a sweeping restructuring by cutting thousands of jobs, executing facility closures, trimming board compensation and overhauling the Isreal-based company’s senior executive team. One of his moves was to officially promote Michael McClellan to chief financial officer. Along with its second-quarter results on Wednesday, Teva said McClellan was departing for personal reasons.
McClellan, who is stepping down for undisclosed reasons requiring him to be close to his family, is expected to stick around through the announcement of Teva’s third quarter results to help with the transition. On Wednesday, Teva posted a smaller-than-expected drop in profit and reiterated its outlook for 2019.
“During his term, Mike played an instrumental role in executing on the company-wide two-year restructuring efforts to significantly reduce our cost base and improve business performance,” Schultz said in a statement.
While the world’s largest generic drug maker is working on making itself leaner and meaner to shed some debt and preserve shareholder value, it has recently come under a cloud of opioid litigation — along with peers such as J&J $JNJ. In May, the company was also accused of being a kingpin in a massive price-fixing conspiracy between 2013 and 2015 alongside 19 other generic manufacturers in the United States, in an antitrust lawsuit filed by 44 states.
Teva $TEVA reported an adjusted profit of 60 cents per diluted share in the second quarter, down from 78 cents a year earlier. Revenue slipped 8% to $4.34 billion. While Schultz’s turnaround is still under construction, he was still one of the highest-paid CEOs of 2018. Including the $20 million cash bonus he was given in his first full year managing the company, his compensation package for the year totaled a hefty $32.5 million.