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J. Michael Pearson
J. Michael Pearson

J. Michael Pearson is a Canadian American pharmaceutical company executive, who was the chairman and CEO of the publicly traded Laval-based Valeant Pharmaceuticals International, until he was replaced in April 2016 by Joseph C. Papa. On April 27, 2016 Pearson, Bill Ackman and Howard Schiller appeared before the United States Senate Special Committee on Aging to answer concerns about the repercussions for patients and the health care system faced with Valeant’s business model.

Valeant Pharmaceuticals International:

Before taking over as Valeant CEO in 2008, Pearson worked for them as outside consultant in 2007. In 2008, Pearson began implementing his strategy by selling off portions of Valeant’s European business to Meda AB, In 2010, Valeant and the Canadian-headquartered company Biovail agreed to merge, with the resulting company being called Valeant and being headquartered in Ontario Pearson was named CEO of the new company and then, in March 2011, he was appointed chairman of the board. The Biovail merger, by headquartering the company in Canada, allowed the company to reduce its tax rate to approximately 5%  Later, Valeant would be called upon to testify before Congress, along with Burger King, about how its tax inversion potentially gave it a competitive advantage over American companies. A New York Times article credits Pearson’s “tough tactics” for the financial success of the “fast-growing” Valeant Pharmaceuticals International. The article also highlights the criticism that Valeant Pharmaceuticals controversial strategy has attracted from patients finding themselves unable to afford drugs after price hikes by Valeant. This pricing controversy was originally raised when Senator Bernie Sanders and Representative Elijah Cummings sent a letter to Valeant seeking justification for huge price increases it took on two life-saving drugs, Nitropress and Isuprel. The company had raised the price of Isuprel by almost six times and the price of Nitropress by over three times. Shortly after, Democratic members of Congress attempted to subpoena Valeant for this information. As CEO, Pearson’s business strategy was to eliminate “risky and inefficient” Research and Development to the equivalent of “only 3 percent of its sales” whereas “traditional big drug companies spend 15 to 20 percent of sales on research and development”. Instead he acquired dozens of companies with existing drugs and saved money by laying off their employees. This model worked and Valeant’s stock price rose by over 1000%. By 2013, under Pearson’s tenure, Valeant was the largest pharmaceutical company in Canada. By 2015 Pearson had “nearly $3USD billion in stock and options” in Valeant, with “the potential to own hundreds of millions of dollars more.” Since Pearson became CEO Valeant shares “have returned more than 2,300 per cent” making Valeant the “most valuable” and the best performer on the Toronto Stock Exchange. By July 2015 Valeant’s market capitalization was $CDN 113-billion which is about $4-billion more than the Royal Bank of Canada. However, by October of that same year, following negative press about its pricing tactics and a particularly negative analyst report from Citron Research, Valeant’s stock dropped to approximately $CDN 78-billion.

In a conference call with Valeant investors on October 19, Pearson announced changes in Valeant’s business strategy. They will spend “more on research and development and less on acquisitions of smaller drug makers” and there will be “minimal price increases on its products” in 2016.

Pearson was hospitalized on December 25 and was treated for severe pneumonia. Valeant’s board created an office of the Chief Executive Officer to immediately take over his duties and a supporting committee to oversee the office of the CEO. The committee includes Robert Ingram, president of ValueAct Capital Mason Morfit and former Valeant CFO Howard Schiller. According to Reuters, following the announcement Valeant shares fell “10.5 percent to $102.14” on the New York Stock Exchange after its stock had already fallen more than 60 percent since August. Industry critics claim that since Valeant has suffered from credibility issues over the pricing controversy and is still not on solid ground, the company needs strong decisive leadership not a “cumbersome” committee.

On February 29, 2016, Pearson returned to the now controversial company. On March 15, shares in the company collapsed by 50 percent following a disastrous earnings call fronted by Pearson. On March 21, 2016 Valeant reported that CEO Pearson would be leaving the company, a decision reported by CNBC that “was not mutual”. The company also reported that former Chief Financial Officer Howard Schiller was to blame for “improper conduct” and requested he resign from the board of directors, which Mr. Schiller declined to do. “Circular Firing Squad Emerges” was how Piper Jaffray & Co analysts led by David Amsellem put it.

On April 13, 2016 it was announced that Pearson would be deposed from his position as CEO of Valeant on April 18, 2016. The removal was ordered by the Senate Special Committee on Aging who have been probing the soaring price of prescription drugs. Pearson initially fought the decision though Valeant’s board directed him to comply.

Controversies:

Tax rate

Valeant’s conversion to a Canadian company via the Valeant/Biovail merger in 2010 allowed the company to reduce its corporate tax rate to approximately 5%. Congress used Burger King and Valeant as examples of companies with tax advantages in a July 2015 investigation of corporate taxation. The investigation primarily focused on the advantage that foreign companies have in acquiring American companies due to their low tax rates  and members of Congress suggested that many of the deals by foreign companies, including Valeant, relied upon tax advantages to be completed. During the testimony, Valeant CFO Howard Schiller stated that “Valeant does not take into account tax synergies in either identifying or pricing potential acquisition targets”, but articles suggested this was in contrast to previous comments made by Pearson, including a comment made during Valeant’s pursuit of Allergan in a hostile takeover attempt when he was quoted as saying “no other potential acquirer of Allergan has the…tax synergies we have”.

Pricing

When pharmaceutical pricing tactics became a topic for the press and politicians in 2015, Valeant’s price increase history became a major focus, with investigations revealing that the company had taken substantial price increases on many products from 2013 through 2015, including two products that it acquired and then raised the price on substantially. In response to inquiries about these price increases, Valeant’s company spokesperson said “Our duty is to our shareholders and to maximize value”. This sentiment was later echoed by Pearson, who said “My primary responsibility is to Valeant shareholders. We can do anything we want to do”.

Pearson agreed to appear before a Senate committee investigating the matter in April 2016.

Accounting tactics:

Many have accused Pearson’s strategy at Valeant of being a roll-up dependent on acquisitions and aggressive accounting tactics while others claim it is not. As Valeant’s debt reached roughly $30 billion by 2016 concerns continued to be raised about accounting practices. Notable critics of Valeant and its accounting practices include Jim Chanos, who predicted the fall of Enron, Herb Greenberg, John Hempton, Charlie Munger, Jim Grant, AZ Value Investing  and Citron Research. Notable defenders of Valeant against these allegations include activist investors  Bill Ackman and Jeffrey Ubben. Valeant defended itself against these allegations in an SEC filing in October 2015.

Pearson was the highest paid CEO in Canada in 2015, receiving US$182.9 million during a period when Valeant’s share price fell by 30%.

Marillyn Hewson
Marillyn Hewson

Marillyn A. Hewson (born c. 1954) is Chairwoman, President and Chief Executive Officer of Lockheed Martin. In 2015, Hewson was named the 20th most powerful woman in the world by Forbes.

Early life:

Hewson was born in Junction City, Kansas. She earned her Bachelor of Science degree in business administration and her Master of Arts degree in economics from the University of Alabama. She also attended the Columbia Business School and Harvard Business School executive development programs.

Career:

Hewson joined Lockheed Martin in 1983. She has held a variety of increasingly responsible executive positions with the company, including President and Chief Operating Officer, and Executive Vice President of Lockheed Martin’s Electronic Systems business area. On November 9, 2012 she was elected to Lockheed Martin’s Board of Directors. She has been the CEO since January 2013. She also serves on the Board of directors for Sandia National Laboratories since 2010 and DuPont since 2007. Since becoming CEO in 2013, Lockheed’s market cap has doubled.

In July 2015, Hewson announced the purchase of Sikorsky Aircraft, the producers of Sikorsky UH-60 Black Hawk helicopters, giving Lockheed its own helicopter building capability. Hewson has also shifted more company efforts towards building military hardware.

In 2010, 2011, 2012, and 2015 she was named by Fortune magazine as one of the “50 Most Powerful Women in Business”. In the September 15, 2015 issue of Fortune magazine, Hewson was ranked 4th. She was named the 21st most powerful woman in the world by Forbes in 2014. She rose one spot to the 20th most powerful woman in the world in Forbes’ 2015 ranking.

Mary F. Sammons
Mary F. Sammons

Mary F. Sammons (born 1954) is an American businesswoman who formerly served as the CEO, and is the former chairperson, of Rite Aid.

She was formerly the president and CEO of Fred Meyer.

Biography:

Mary F. Sammons was born in 1954 and hails from Portland, Oregon. She graduated from Marylhurst College (now Marylhurst University) and St. Mary’s Academy.In 2009, Forbes named her the 21st most powerful woman in the world. She was formerly the president and CEO of Fred Meyer.

Masayoshi Son
Masayoshi Son

Masayoshi Son (born August 11, 1957) is a Japanese businessman and the founder and current chief executive officer of SoftBank, the chief executive officer of SoftBank Mobile, and current chairman of Sprint Corporation. According to Forbes magazine, Son’s estimated net worth is US $17 billion and he is the second-richest man in Japan, despite having the distinction of losing the most money in history (approximately $70 billion during the dot com crash of 2000). Forbes also describes him as a philanthropist.

Son was named the world’s 45th most powerful person by Forbes Magazine’s List of The World’s Most Powerful People in 2013.

Background

Of Korean ethnicity, Son’s family adopted the Japanese surname Yasumoto in daily life and Son used this surname as a child. Son pursued his interests in business by securing a meeting with Japan McDonald’s president Den Fujita. Taking his advice, Son began studying English and computer science.

At age 16, Son moved to California and finished high school while staying with friends and family in South San Francisco. After spending two years at Holy Names University, he transferred to the University of California, Berkeley, in which he majored in economics and studied computer science. Enamored by a microchip featured in a magazine, Son at age 19 became confident that computer technology would ignite the next commercial revolution.

Convinced that anything related to microchips could yield a fortune, Son decided to produce at least one entrepreneurial idea a day. He patented a translating device that he eventually sold to Sharp Electronics for $1 million. Applications of the patent include the Wizard series of Sharp PDAs.

Son graduated from Berkeley with a BA in economics in 1980, and started Unison in Oakland, California, which has since been bought by Kyocera. In 1990, Son Masayoshi adopted Japanese citizenship.

Yahoo! BB:

Although SoftBank’s stake in Yahoo! had dwindled to 7%, Son established Yahoo! BroadBand in September 2001 with Yahoo! Japan in which he still owned a controlling interest. After a severe devaluation of SoftBank’s equity, Son was forced to focus his attention on Yahoo! BB and BB Phone. So far, SoftBank has accumulated about $1.3 billion in debt. Yet, Yahoo! BB acquired Japan Telecom, the then third largest broadband and landline provider with 600,000 residential and 170,000 commercial subscribers. Yahoo! BB is now Japan’s leading broadband provider.

Vodafone K. K.:

On March 17, 2006, Vodafone Group announced it had agreed to sell Vodafone K.K. to SoftBank for approximately 1.75 trillion Japanese yen (approximately US$ 15.1 billion). On April 14, 2006, SoftBank and Vodafone K. K. jointly announced, that the brand and company name Vodafone will be changed to a “new, easy-to-understand and familiar company name and brand”. Masayoshi Son is the CEO (Representative Director) of Vodafone K. K.

Sprint Corporation:

Through SoftBank Masayoshi Son bought 76% in Sprint. SoftBank has further accumulated shares in Sprint (S); to about 80% ownership.

Investment in Solar Power:

In response to the Fukushima Daiichi nuclear disaster in 2011, Masayoshi Son criticized the nuclear industry for creating “the problem that worries Japanese the most today”, and engaged in investing in a nationwide solar power network for Japan.

Philanthropy:

In 2011 Masayoshi Son pledged to donate 10 billion yen ($120 million) and his remaining salary until retirement to help support victims of 2011 Tōhoku earthquake and tsunami.

Michael O’Leary
Michael O’Leary

Michael Kevin O’Leary is an Irish businessman and the chief executive officer of the Irish airline Ryanair. He is one of Ireland’s wealthiest businessmen.

Early lifeL:

Michael O’Leary was born 20 March 1961, the second in a family of six, in Kanturk in County Cork. He was educated at Clongowes Wood College, County Kildare. In 1979 he began a four-year Bachelor in Economic and Social Studies programme at Trinity College Dublin. He graduated from Trinity and then worked as a trainee with Stokes Kennedy Crowley (later known as KPMG), studying the Irish tax system. He left after two years in 1985, setting up profitable newsagents in Walkinstown and Terenure, Dublin.

While at Stokes Kennedy Crowley, O’Leary met Tony Ryan, head of GPA (Guinness Peat Aviation, a leasing company). Ryan was one of the firm’s clients and O’Leary advised Ryan on his personal income tax affairs. In 1987, he then hired O’Leary as his personal financial and tax advisor, where Ryan’s main interest was in GPA. Ryanair was established around this time and originally followed a traditional business model, but quickly began to lose money. Subsequently O’Leary was sent to the USA to study the novel Southwest Airlines business model.

Ryanair career:

O’Leary was deputy chief executive of Ryanair between 1991 and 1994 and was promoted to chief executive of Ryanair in January 1994. Under O’Leary’s management, Ryanair further developed the low-cost model originated by Southwest Airlines. O’Leary may have described the inauguration of the ancillary revenue movement during a 2001 interview in The Sunday Times.
“The other airlines are asking how they can put up fares. We are asking how we could get rid of them.” The business model envisioned by O’Leary uses receipts from on board shopping, internet gaming, car hire and hotel bookings to replace the ticket revenue from selling airline seats. Savings are also made by negotiating discounts with airports for reduced landing fees. In many cases, regional airports have made no charges so as to secure flights that bring passengers and wealth into their area.

The deregulation of Ireland’s major airports and a transformation of traditional full-service airlines are among his demands.

He claims he was approached to front the BBC’s version of The Apprentice but declined as it was “too much of a distraction”.

In August 2014, O’Leary unveiled plans to develop a Ryanair Israel to operate extensive flights to and from Israel and a large network of European cities. The plans include the establishment of a large hub in Israel.

Controversy and reputation:

O’Leary has a reputation for loose talk in the airline industry and among its regulators. Many press articles have often described him as arrogant, and prone to making comments which he later contradicts. He has been extravagantly outspoken in his public statements, sometimes resorting to personal attacks and foul language. His abrasive management style, ruthless pursuit of cost-cutting and his explicitly hostile attitude towards corporate competitors, airport authorities, governments, unions and customers has become a hallmark. He was reported to have been aggressive and hostile in dealings with a woman who was awarded free flights for life in 1988. In 2007, he was forced to retract a claim that Ryanair had cut emissions of carbon dioxide by half over the previous five years; the claim should have been that emissions ‘per passenger’ had been cut by half. O’Leary has been reported to have impersonated a journalist in an attempt to find information passed on to a newspaper following a safety incident on a Ryanair flight. On occasion he has apologised for personal attacks under threat of legal action.[29] He has been criticized by a judge for lying, who said he was lucky not to be found guilty of contempt of court.

In a press conference discussing Ryanair’s planned intercontinental service RyanAtlantic, O’Leary jokingly described the airline’s planned business class travel experience as featuring “whores and rum”. In 2002 he said that his company is against any long-haul transatlantic services, stating that:

The low-cost model only really works for short-haul flights […] If we started flying farther afield, we’d have to do something stupid like introducing what I call a ‘rich class’ to make it pay.

However, more than a decade later, in 2013 he said, while at the Paris Air Show, that he wanted to sell cheap flights from the U.S. to Europe for as low as 10 euros ($13) or $10, if conditions were right. He said that he needed a fleet of at least 30 twin-aisle aircraft and access to ports (e.g. major U.S. and European cities, in the airline industry there are so called slots or sometimes gates, often regulated by law, and without obtaining them it is impossible to have regular service to airports). Despite his claims in 2002, there were so called budget airliners in the past – for example Laker Airways flights from London to New York in the late 1970s or long-hauls at budget-fares on other continents like AirAsiaX in Malaysia and the Australian Jetstar Group.

Reacting to the decision to close European airspace in April 2010 over worries about the ash plume from an erupting Icelandic volcano he said “there was no ash cloud. It was mythical. It’s become evident the airspace closure was completely unnecessary.” One study concluded that serious structural damage to aircraft could have occurred if passenger planes had continued to fly. Scientists and the industry as a whole remain unconvinced, however.

In May 2014 O’Leary was highly critical of a 24-hour strike by Aer Lingus cabin crew, staged on 30 May 2014. Aer Lingus, whose biggest shareholder at the time was O’Leary’s company Ryanair, had to cancel 200 flights and disrupt travel plans for 200,000 people. O’Leary accused Aer Lingus of “mismanagement” of its employee relations, called for the sacking of a board member, and said the striking employees should be punished by having their discount travel incentives withdrawn for a year.

According to the Bilderberg Group Michael O’Leary will be attending the secretive Bilderberg Group this year.

Registration of private car as taxi:

Michael O’Leary’s personal Mercedes-Benz S500, operated by O’Leary Cabs and complete with “for hire” roof bar
In 2004 he purchased a taxi plate for his Mercedes-Benz S-Class, to enable it to be classified as a taxi so that he could legally make use of Dublin’s bus lanes to speed up his car journeys around the city. A press report suggested that since he had stopped driving his own taxi, he has employed a driver with full PSV licence. In 2005 the Irish transport minister expressed concern at this abuse by O’Leary and others.

Mike Duke
Mike Duke

Michael Terry “Mike” Duke (born December 7, 1949) is an American businessman. He served as the fourth chief executive officer of Walmart from 2009 to 2013.

Biography:

Duke joined Wal-Mart in 1995, serving as the executive in charge of the company’s international operations. He became the CEO of Wal-Mart in February 2009.

Duke also serves on the board of directors for the Retail Industry Leaders Association and Arvest Bank’s community advisory board. He formerly held positions with a number of retailers, including Federated Department Stores, May Department Stores, and Venture Stores. Duke earned a BS in Industrial Engineering from the Georgia Institute of Technology in 1971, where he joined the Delta Sigma Phi Fraternity, and now serves as a member of the institution’s advisory board. He sits on the Board of Directors of the Consumer Goods Forum.

In 2010 he set goals to make Wal-Mart enery efficient as possible and to open Wal-Mart’s in countries like Russia.

In 2012, his salary was $18.2 million. In 2013, press reports indicated that the total value of Duke’s pension, deferred compensation and other retirement accounts totalled over $113 million.

Duke ranked No. 10 on Forbes list of The World’s Most Powerful People in 2013. That same year, Wal-Mart ranked No. 15 on Forbes list of Most Patriotic Brands—and the only retailer on the list—as voted by U.S. consumers. As of November 25th, 2013, Duke’s tenure as CEO ended with his sudden replacement by the board of Walmart.

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