01—Abstract
Summary
Summary of the 8-K filed May 15, 2024. Cited figures are marked; the original filing is the authoritative source.
On May 15, 2024, Teva Pharmaceutical Industries Ltd. (NYSE and TASE: TEVA) announced that Eric Drapé, Executive Vice President, Global Operations, will leave the company, remaining in his role until June 3, 2024.
Matthew Shields has been appointed as his successor, effective June 3, 2024, as Executive Vice President, Global Operations and a member of Teva Executive Management. Shields will be based at Teva's U.S. headquarters and will report directly to President and CEO Richard Francis. The press release describes Teva Global Operations (TGO) as the company's manufacturing and supply division.
Shields, age 50, has more than 25 years of experience in the biopharmaceutical and animal health industries, most recently as Senior Vice President for Manufacturing at Merck Animal Health, which he joined in 2020. Earlier roles include senior positions at Sanofi from 2017 to 2020 and at Amgen from 2000 to 2017. The filing discloses his compensation: an initial base salary of $825,000,a eligibility for an annual cash incentive with a target equal to 100% of base salary, equity-based award eligibility, and a $200,000 sign-on cash award plus relocation benefits.
Severance upon termination by Teva (other than for gross or willful misconduct) equals nine times his monthly base salary, plus continued medical insurance costs for 18 months and a nine-month non-compete indemnity equal to nine times his monthly base salary. If he is terminated within one year following certain change-of-control transactions, he would receive an additional $1.5 millionb lump sum.
The filing also states that Teva's press release describes Drapé's tenure as having standardized processes, increased agility and improved the operating margin of the TGO organization. The 8-K is furnished under Item 7.01 and is not deemed filed for purposes of Section 18 of the Exchange Act.
02—Key points
Key Highlights
- Eric Drapé, Executive Vice President, Global Operations, is leaving Teva and remains in his role until June 3, 2024.
- Matthew Shields is appointed Executive Vice President, Global Operations and a member of Teva Executive Management, effective June 3, 2024.
- Shields will report directly to President and CEO Richard Francis and be based at Teva's U.S. headquarters in Parsippany, NJ.
- Shields's initial base salary is $825,000, with a target annual cash incentive equal to 100% of base salary and a $200,000 sign-on cash award.
- Severance on termination by Teva equals nine times monthly base salary plus 18 months of continued medical insurance costs; a non-compete indemnity totals nine times monthly base salary over nine months.
- A post-change-of-control termination within one year would trigger an additional $1.5 million lump sum cash payment.
- Teva's press release credits Drapé's tenure with standardizing processes, increasing agility and improving the operating margin of Teva Global Operations.
03—Questions
Frequently Asked Questions
Who is replacing Eric Drapé and when does the change take effect?
Matthew Shields is appointed as Executive Vice President, Global Operations, effective June 3, 2024. Drapé remains in his role until that date.
What is Matthew Shields's background?
Shields is 50 years old and has more than 25 years of experience in the biopharmaceutical and animal health industries. He was most recently Senior Vice President for Manufacturing at Merck Animal Health, which he joined in 2020. He previously held senior roles at Sanofi from 2017 to 2020 and at Amgen from 2000 to 2017.
What compensation has Teva agreed to for Shields?
Shields receives an initial base salary of $825,000 and is eligible for an annual cash incentive with a target equal to 100% of base salary, along with equity-based awards under the company's equity compensation plan. He also receives a $200,000 sign-on cash award and certain relocation benefits.
What severance protections does Shields have?
If Teva terminates him, other than for gross or willful misconduct, he receives cash severance equal to nine times his monthly base salary and payment of certain continued medical insurance costs for 18 months. A nine-month non-compete indemnity equals nine times his monthly base salary. If terminated within one year after certain change-of-control transactions, he receives an additional $1.5 million lump sum.
Why is Drapé leaving, and what does the filing say about his tenure?
The filing does not give a reason for Drapé's departure. The press release says he is leaving after 11 years with the company, including more than four years as Executive Vice President, Global Operations, and credits him with standardizing processes, increasing agility and improving the operating margin of the organization.
04—Continue