Teva appoints Kare Schultz CEO

K?re Schultz photo: PR

Schultz is currently CEO of H. Lundbeck. He will be based at Teva's Petah Tikva headquarters. Teva's share price is up sharply.

Teva Pharmaceutical Industries Ltd. (NYSE: TEVA; TASE: TEVA)) today announced that its board of directors has named Kåre Schultz (56) to become the company’s president and chief executive officer. Schultz will succeed Dr. Yitzhak Peterburg, who will continue to serve as interim CEO until Schultz joins the company. Teva said that the announcement represented the successful completion of the global search process to identify the best leader for the company, and was executed by the Teva board with the assistance of Heidrick & Struggles. Schultz will be relocating to Israel and will be based at the company’s Petah Tikva headquarters.

Teva's share price is up by more than 8% on the Tel Aviv Stock Exchange.

Schultz is a seasoned veteran in the healthcare industry with a distinguished, nearly thirty year career in global pharmaceutical and healthcare companies. "Over the course of his career, Mr. Schultz has developed a unique perspective overseeing generic and specialty drug portfolios, while managing complex business operations around the world. He most recently served as the president and CEO of H. Lundbeck A/S, where he is credited with leading significant restructuring initiatives and launching a robust turnaround strategy focused on driving a sustainable global cost structure and operational model. As a result of his leadership, the company is on track to achieve all-time high revenue and earnings. Before his role as at H. Lundbeck A/S, Schultz served as Chief Operating Officer of Novo Nordisk, where he had a key role in building the company into one of the world’s best-performing drugmakers and implementing a metrics-focused approach to the company’s operations," Teva's announcement said.

“With extensive global pharmaceutical experience, a strong track record executing corporate turnaround strategies, driving growth and international expansion at low incremental cost and delivering on promises to shareholders, as well as a commitment to a culture of compliance, Kåre is the right leader to take Teva to the next level,” said Dr. Sol J. Barer, chairman of Teva’s board of directors. “Kåre has deep insight into the global pharmaceutical industry and a keen knowledge of the generic and specialty drug markets. His proven strategic, financial and operational capabilities and his strong commitment to growth will enhance value for all stakeholders and position Teva for long-term success. He brings a strong sense of corporate citizenship, and his disciplined commitment to excellence makes him a clear professional and cultural fit with our company. We are pleased to welcome a world-class leader of Kåre’s stature to Teva and look forward to working closely with him to build the Teva of the future for shareholders, employees and patients around the world.”

“I am honored to join Teva, an iconic company that I have long admired during my career," Schultz said. "What drew me to Teva, and what makes Teva different from its peers, is its unique commitment to growing an extensive global reach while continuing to provide new and high-quality treatments for patients and an innovative culture for its employees. I am proud to be joining a company that helps millions of patients around the world on a daily basis with its broad range of generic and specialty drugs and solutions. I look forward to working closely with the entire team at Teva to build a future of success for the company and its stakeholders.”

Dr. Yitzhak Peterburg said, “We are delivering on the commitments we have made over the last several months. We are optimizing our operations and geographical footprint while focusing our resources on the specialty and generics pipeline assets that offer the most attractive return on investment. In addition, we are on course to hit our target of generating at least $2 billion from the sale of non-core assets, which we will use to strengthen Teva’s balance sheet. It is a privilege to lead Teva and I look forward to continuing to do so during this time, and will work with Kåre to ensure a seamless transition once he joins.”

In its announcement to the Tel Aviv Stock Exchange, Teva provided details of Schultz's compensation package. His employment agreement is for five years with automatic renewal for one-year periods (or up to two years after a change of control in the company).

Schultz will receive a basic salary of $2 million, a performance-based bonus of 140% (and a maximum opportunity of 200% of his annual base salary), and annual equity incentives with a total target grant date fair value of $6 million. He will receive the same employee benefits as are provided to similarly situated senior executives of the company.

Upon commencing employment, Schultz will also receive a restricted stock unit award with a grant date fair value of $5 million (according to the Teva's closing share price on the date before the announcement of the appointment) which will vest and settle in equal installments on the third, fourth and fifth anniversaries of the date he commences employment with the company (the "effective date"), subject to his continued employment through the applicable vesting dates; and two sign-on performance stock unit awards, each with a target grant date fair value of $7.5 million (according to the same share price), which will be earned based on the achievement of performance goals related to the increase in the price of the company's shares over three- and five-year periods following the effective date, and will vest on the third, fourth and fifth anniversaries of the effective date (in the case of the award with a three-year performance period) and on the fifth anniversary of the effective date (in the case of the award with a five-year performance period), in each case subject to his continued employment through the applicable vesting dates.

He will also receive a sign-on cash award of $20 million, which will vest and be paid in two equal installments three and six months following the effective date, subject to his continued employment through the applicable vesting dates.

In connection with his relocation to Israel, Schultz will also receive a housing reimbursement and certain relocation benefits in accordance with the company's policies.

If Teva terminates his employment is without "cause", or if he leaves for "good reason" (each term as defined in the employment agreement), he will be entitled to cash severance equal to his annual base salary, and vesting of the stock unit awards due to him, plus vesting of any portion of the sign-on cash award that is unvested. If the date of termination occurs within the first year following a merger of the company, an additional cash severance payment equal to his annual base salary will be payable.

Published by Globes [online], Israel business news - www.globes-online.com - on September 11, 2017

© Copyright of Globes Publisher Itonut (1983) Ltd. 2017

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K?re Schultz photo: PR
K?re Schultz photo: PR
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