Eight-figure Purdue bonus plan gets OK

Judge overseeing bankruptcy has not ruled CEO payment proposal

STAMFORD — Purdue Pharma can move ahead with a new round of employee bonuses that could total up to nearly $36 million, while a court ruling has not been made yet on a controversial proposal to award another sevenfigure bonus to its chief executive.

The payments would be distributed among more than 600 employees, according to a plan approved this week by the judge overseeing the OxyContin maker’s bankruptcy.

Citing an annualized “voluntary” turnover rate of 13 percent from the start of its bankruptcy in September 2019 through Aug. 31, Stamford-based Purdue has said in court filings that it needs the bonuses to address a “real and serious attrition problem.”

“We are pleased to have received the court’s approval to make nearly all of the requested payments under our longstanding discretionary compensation programs,” Purdue said in a statement Friday. “This will help us retain and motivate our valued employees as we seek to advance our proposed settlement framework.”

Connecticut Attorney General William Tong declined to comment.

Other parties, meanwhile, registered their opposition to the payments.

“Because the case commenced over a year ago, no plan has been filed, no payments have been distributed to creditors, it is unclear when creditors will receive a distribution, and it is also unclear if such distribution will even be meaningful,” U.S. Trustee William Harrington, who represents the Department of Justice, said in a court filing last month. “The facts and circumstances of this case do not justify requested bonus payments to (executive) insiders or the retention payments to noninsiders.”

Similar disputes arose last year over another package of bonuses, totaling about $35 million, that was also approved by Judge Robert Drain.

A decision on a contentious plan to cumulatively pay CEO Craig Landau and seven other top executives up to nearly $10 million in performance-based bonuses will not be made before the next court hearing, on Oct. 28. Landau could receive between $2.6 million and $3.5 million, according to the plan Purdue submitted last month.

The company has also outlined plans for retention payments for Landau and the other executives that could total up to $3.7 million.

In January, Drain approved a 2019 performance bonus of $1.3 million for Landau.

Several Democratic senators, including Connecticut’s Richard Blumenthal, objected because of concerns that Landau might have presided over “criminal activity” during his time with the company.

Landau is not named as a defendant in Connecticut’ s lawsuit against Purdue, although others such as Massac hus et ts have personally accused him of wrong doing.

Purdue denied that Landau had been involved in any wrongdoing and has generally rejected the allegations in the thousands of pending lawsuits that it fueled the opioid crisis with deceptive opioid marketing.

The overarching goal of the bankruptcy — to reach a comprehensive settlement of the lawsuits — has not yet been reached. Purdue has offered a proposal it values at more than $10 billion, but Connecticut and 23 other “nonconsenting states” have turned down the plan because they see it as insufficient.

Connecticut and other plaintiffs have pledged to use any settlement funds solely for efforts to mitigate the opioid epidemic.