Laval, Canada-based Valeant Pharmaceuticals CEO Joe Papa made a big bet on his compensation package, Fortune reports.
After accepting the CEO position in May 2016, Valeant paid him approximately $63 million for seven months work, but Mr. Papa didn’t receive all his compensation. Nearly half of his compensation package relies on Valeant’s stock performance.
Here is what you need to know.
1. Mr. Papa has to increase Valeant’s stock 460 percent in three years to receive his compensation package, Fortune reports.
2. Specifically Valeant needs to trade at or above $60 a share, with a market cap of $20.5 billion in three years. Valeant’s current market cap is $3.92 billion as of March 30, 2017.
3. If Mr. Papa doesn’t meet the performance goals, he will forfeit several millions of dollars. If he hits the performance targets, analysts estimate he would make approximately $800 million over four years.
4. When Mr. Papa took the job in May 2016, Valeant was trading at $35 a share. It has plummeted in the time since. Fortune 500 companies have quadrupled share prices in the past, but Fortune reports, “it’s very, very rare.”
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