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CEO of bankrupt Purdue Pharma to get US$1.3m bonus
[NEW YORK] Craig Landau, chief executive officer of bankrupt opioid maker Purdue Pharma, will get a much-reduced bonus this year after months of fighting with creditors.
US Bankruptcy Judge Robert Drain approved a US$1.3 million bonus for Mr Landau in a Friday hearing. That's less than half of what Purdue planned on paying him. The company agreed to slash the payout by 63 per cent, court papers show, and Mr Landau will receive the sum in two disbursements this year rather than one in the spring.
Mr Landau agreed to "cuts and changes far deeper than any other employees at Purdue" and the company "bent over backward multiple times to reach peace", Marshall Huebner of Davis Polk & Wardwell LLP said in the hearing.
A group of states - ones opposing a proposed settlement between Purdue and parties suing Purdue for its role in the US opioid crisis - have for months pressed the bankruptcy judge to strike down any bonus payments to Mr Landau, pointing to lawsuits in which the executive is accused of playing a role in the crisis.
The judge for months delayed ruling on Mr Landau's bonus, encouraging the company to negotiate with creditors. The lawyers argued that Mr Landau's pay was already well below the market rate and that a small number of still-pending lawsuits do not offset the need to have Mr Landau, a long-time Purdue executive, guide the company through bankruptcy.
"Market compensation ultimately underlies the court's decisions," Justice Drain said in the hearing. "People don't work, generally speaking, for less than market - whether they make US$30,000 a year or US$200,0000 a year or US$1 million a year."
Purdue, which filed for bankruptcy in September after being overwhelmed by lawsuits, has proposed handing over control of the business to a trust operated for the benefit of those impacted by the opioid crisis.