CEO of bankrupt Purdue Pharma will get $1.3 million bonus
Craig Landau, chief executive officer of bankrupt opioid maker Purdue Pharma LP, will get a much-reduced bonus this year after months of fighting with creditors.
U.S. Bankruptcy Judge Robert Drain approved a $1.3 million bonus for 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%, court papers show, and Landau will receive the sum in two disbursements this year rather than one in the spring.
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 U.S. opioid crisis – have for months pressed the bankruptcy judge to strike down any bonus payments to Landau, pointing to lawsuits in which the executive is accused of playing a role in the crisis.
The judge for months delayed ruling on Landau’s bonus, encouraging the company to negotiate with creditors. The lawyers argued that 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 Landau, a longtime Purdue executive, guide the company through bankruptcy.
“Market compensation ultimately underlies the court’s decisions,” Drain said in the hearing. “People don’t work, generally speaking, for less than market – whether they make $30,000 a year or $200,0000 a year or $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.
The case is Purdue Pharma LP, 19-23649, U.S. Bankruptcy Court for the Southern District of New York (White Plains)