Discontent at Allergan over CEO’s chairman role – report
There is discontent among Allergan’s shareholders over CEO Brent Saunders’ dual role as chairman, according to press reports.
Reuters reported that Botox maker Allergan defeated a non-binding resolution tabled by hedge fund Appaloosa LP, that would have instructed Saunders to give up his role as chairman.
Citing sources close to the matter, the news wire said that a loss would have been awkward for Saunders who has built Allergan through a series of deals after taking over as CEO in 2014.
Saunders took over as CEO of Allergan in 2014 after the generics company Actavis, which he was heading at the time, took over the Botox maker and took its name.
Saunders has held both CEO and chairman roles since October 2016 – until then he had been running the company alongside executive chairman Paul Bisaro, who left to become CEO of Impax Laboratories.
49 year-old Saunders has committed to separating the roles once again when he steps down, but not before then, and has not publicly announced when he plans to leave.
A shareholder vote on the dual role issue has concluded, and Reuters reported that Saunders and his management team winning enough support to fight off the challenge.
But the resolution suggested that some investors are in favour of stricter corporate governance standards.
The vote comes at a time when Allergan is under pressure to boost its depressed share price, and has launched a strategy review.
This review is only likely to result in the sale of Allergan’s relatively small infectious disease unit.
Overall the way forward for the company is unclear as its strategy had been focused on a $160 million sale to US-based Pfizer in 2016, which was killed by former president Barack Obama’s crackdown on tax inversion deals.
The plan had been to reverse Pfizer into Allergan, allowing the former to cut its tax bill by domiciling overseas.
Updated to acknowledge that the vote went in Saunders’ favour.
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