Purdue Pharma seeks court approval of 2021 employee bonus plans

By Sarah Lizee

Olympia, Wash., June 29 – Purdue Pharma, LP is seeking court approval of a key employee incentive plan and a key employee retention plan for 2021, according to a motion filed Monday with the U.S. Bankruptcy Court for the Southern District of New York.

The proposed KEIP would apply to the debtors’ five current insider employees, including the president and chief executive officer, the executive vice president, the chief financial officer, the executive vice president, the general counsel and corporate secretary, the chief technical operations officer and the president of Rhodes Pharmaceuticals.

Participants of the KEIP would receive an annual award with a target value and a long-term incentive compensation grant payable in 2024.The annual award payments will be contingent on the debtors’ achievement of 2021 performance metrics. The maximum cost of the total annual awards is $5.39 million.

About 506 employees will participate in the KERP. Each participant will receive an award comprised of an amount equal to the 2021 KERP participant’s target AIP, a long-term incentive compensation grant payable in 2024, and, with respect to some participants, additional targeted retention payments. The maximum payment under the KERP is about $16.1 million.

“The debtors’ workforce has been instrumental both in achieving the progress to date and in shepherding the debtors’ assets and businesses through these challenging Chapter 11 cases to enable the reorganized debtors to put as much estate value as possible to work for the American people,” Purdue said in its motion.

“That value – measured in the billions – depends on the efforts and skill of the debtors’ employees.”

A hearing is scheduled for July 19.

Purdue Pharma is a Stamford, Conn.-based drug manufacturer. It filed for Chapter 11 bankruptcy in the U.S. Bankruptcy Court for the Southern District of New York on Sept. 15, 2019 under case number 19-23649.

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