Judge: Purdue workers should get bonuses, but maybe not CEO

White Plains, N.Y. — More time is needed to sort out whether the CEO of OxyContin maker Purdue Pharma should receive a $1.3 million bonus next year, but the company should be allowed to pay about $35 million in bonuses to 682 other employees, the judge overseeing the company’s bankruptcy case said Wednesday.

There were objections at the hearing only to payments to CEO Craig Landau and a group of nine other upper-level “insider” employees. State governments and a watchdog committee didn’t dispute the company’s contention that bonuses would be needed to keep employees working and the company running — especially after it agreed to trim many of the bonuses.

Judge Robert Drain said he would sign an order for all the employees except Landau to get bonuses next year. He said it would contain a provision that it could be withheld from anyone found liable in lawsuits over the toll of the opioid crisis linked to more than 400,000 deaths in the U.S. since 2000.

Purdue, based in Stamford, Conn., is in bankruptcy court as part of an effort to settle more than 2,700 lawsuits it’s facing over the toll of opioids.

Drain said officials with the company and other interested parties should continue to discuss whether it’s appropriate for Landau to receive a bonus on top of his $2.6 million base salary.

Drain said on the bench that he wasn’t especially moved by the contention from a group of 24 states that Landau should have his pay docked because of a possibility that he could be held liable in the future.

But he said he was concerned when it was revealed at the hearing that the CEO’s base salary was doubled in 2018 shortly after the company hired a law firm to consult on filing for bankruptcy — and that the same year, he received $6 million of the $12 million in retention payments that he had been scheduled to get from 2020 through 2026.

Purdue lawyer Marshall Huenber said those changes were not a tricky move to pay the CEO more with the possibility of bankruptcy looming but rather part of bigger changes to his compensation that includes a reduced severance package if he leaves the drugmaker.

Landau’s lawyer, Linda Imes, said Landau, a medical doctor who joined Purdue in 1999 and became CEO in 2017 after running its Canadian sister company, was behind a decision last year to stop marketing opioids to doctors.

In their lawsuits, Colorado and Massachusetts allege that Landau blamed the dangers of opioids on patients rather than the drugs and that he knowingly put patients at risk by having his sales team encourage more prescribing of the drug without disclosing the addiction risks.