Valeant's New Bonus Math Puts Debt Holders in Driver's Seat
- Payouts now tied to Ebitda, a metric watched by creditors
- Drugmaker retooled its reporting after SEC’s October warning
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Valeant Pharmaceuticals International Inc. shareholders, slide over: Debt holders are driving the bus.
The drugmaker has changed how it calculates executive cash bonuses. Their incentives are no longer tied to adjusted earnings per share, which were used as an executive incentive when the company was a market darling. The bonuses will now be pegged to Ebitda -- earnings before interest, taxes, depreciation and amortization -- which, as it happens, is also a metric watched by its creditors.