Former Teva Pharmaceuticals CEO Jeremy Levin, whose departure from the company Wednesday shocked Israel’s financial world, left over deep disagreements with the board over the direction Teva was taking and would have preferred to stay in the position, according to a Thursday report.
Levin felt that the company, Israel’s largest, was unsure of what steps to take to ensure future growth, according to the Israel newspaper Yedioth Ahronoth. The former CEO was also opposed to how layoffs and other cost-cutting measures were to be implemented, even though he had originally championed the moves as part of a program to cut expenses.
Levin “would have preferred to stay on” as CEO, according to sources cited by Yedioth. It was unclear whether Levin had formally resigned from his position. He told Calcalist late Wednesday that “the correct words that should be used are that Teva’s board of directors and I agreed that I will leave my post.”
Teva CFO Eyal Desheh was tapped Wednesday to serve as interim CEO following Levin’s departure, and on Thursday, it was announced that Erez Vigodman would succeed Levin as Teva CEO. Vigodman is a Teva board member who currently serves as CEO of Makhteshim Agan, a large pesticide production and distribution company.
Levin will receive a compensation package that includes a two-year period in which he will receive his full annual salary, which is around $4 million, during which time he will be prohibited from taking the helm of a competing firm, Calcalist reported on Thursday. He will also receive a “golden parachute” bonus of $3 million.
The Tel Aviv Stock Exchange suspended trading in Teva shares Wednesday morning for several hours following the announcement. Hours after the opening of trading on Thursday, shares in the company had fallen by 1.5 percent in the wake of the shake-up.
Teva is one of the largest pharmaceutical companies worldwide, the largest manufacturer of generic drugs, and the largest commercial company in Israel.
Levin’s departure is a “credit negative” for Teva, rating agency Moody’s said Thursday, because it could change the “clearly articulated business strategy closely crafted by Dr. Levin and the board since he joined the company in May 2012.” The departure would not change Teva’s overall rating, the agency said.
The change at Teva may have shocked the market, but it was not a complete surprise. On Sunday, Channel 2 quoted unnamed sources in a report that Levin and TEVA chair Phillip Frost were at odds over the implementation of the company’s cost-cutting measures, and that Levin had threatened to resign. Teva denied the report at the time, calling it “baseless claims.”
The South Africa-born Levin, who took over as CEO two years ago, characterized his tenure as successful and wished the company luck on Wednesday, but indicated he was ready to move on.
“Since I joined Teva, we have made tremendous progress in setting a new course for the company,” Levin said in the statement. “I wish the company and its people, who I respect greatly, every success. I look forward to pursuing new opportunities where I can continue to apply my experience and contribute to the evolution of the global pharmaceutical industry.”
Earlier this month, Teva announced that it would lay off 5,000 employees worldwide, including 800 in Israel, as part of its cost-cutting plans. However, after the announcement caused an uproar in Israel, Levin struck an agreement with the Histadrut labor union to delay the layoffs and coordinate any future workforce cuts with the union and the state.
The layoffs were part of an ambitious cost-cutting program Levin introduced in December 2012.