A series of reports by Teva Pharmaceutical Industries Ltd. (NYSE: TEVA; TASE: TEVA) to the US Securities and Exchange Commission (SEC) include the holdings of senior managers and directors in company shares.
Teva has never reported these figures in the past, because it was not obliged to do so, but from the beginning of 2018 Teva is classed as a US domestic issuer, and is now required to report them by law.
Teva lost its status as a foreign private issuer when the SEC reviewed its status in June last year and found that as a result of the acquisition of Actavis in 2016, more than 50% of Teva's assets are located in the US. It was therefore determined that Teva could no longer be regarded as a foreign company and had to report as a US company.
Under US securities law, a company cannot be defined as foreign if more than 50% of its shares are held by US residents and in addition one of the following conditions is fulfilled: more than 50% of its directors and senior managers are US residents; more than 50% of its assets are located in the US; or its business is managed from the US.
The consequence of the switch to reporting as a domestic US company is that Teva now has to file full reports with the SEC and more frequently, such as yesterday's report on directors and senior managers' holdings.
Last year, when Teva reported that it would not be able to continue to be classed as a foreign issuer, it stated that its board and management would continue to operate from Israel and that its business would continue to be mainly managed from Israel as well.
Among the holdings reported yesterday are:
CEO Kare Schultz holds 591,000 options at a strike price of $11.4 per share (which compares with a current market price of $19.2). He also holds 2 million blocked shares to be allocated on the basis of performance.
CFO Michael McClellan has options at strike prices ranging between $17 and $51 as well as blocked shares.
Director Amir Elstein holds 2 million Teva shares currently worth some $38 million, as well as blocked shares.
Director Dan Suesskind holds 299,000 shares worth $5.9 million.
Published by Globes [online], Israel business news - www.globes-online.com - on January 3, 2018
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