The New York Times reports that Valeant Pharmaceuticals chairman and CEO, J. Michael Pearson has gone on medical leave. The news was not unexpected, as the company had announced last week that Pearson had been hospitalized with severe pneumonia. Rather than appoint an interim CEO, the Times says that Valeant has opted for an “office of the chief executive officer,” comprising several other senior executives, to run the company during his absence. It is not yet clear how long Pearson will be on leave—most likely, the company itself has no idea. According to the Times, Valeant’s stock price fell 6 percent in Monday’s premarket trading.
Pearson had been the key figure in managing the troubled pharmaceutical company’s relationship with concerned investors after a scandal concerning its relationship with a mail-order pharmacy and a Congressional investigation into its pricing practices sent its stock tumbling by more than half since August. At a meeting with shareholders earlier this month, the CEO promised to deliver greater transparency as well as growth, but defended the company’s strategy and declined to apologize for the practices that had gotten it into trouble. Bloomberg‘s report on that meeting and investors’ response to it credited Pearson with “manag[ing] to steady a ship that was sinking fast just weeks ago.” Whether the ship will remain steady without Pearson at the helm remains to be seen.
Pearson’s sudden illness marks the second time in recent months that a medical emergency at the top of the pyramid has thrown a major corporation’s management into crisis mode: In October, United Airlines faced some criticism for taking a few days to announce its plan after its CEO Oscar Munoz had a heart attack. As Munoz had only just come on board at United, the company had no succession plan in place for the ostensibly healthy 56-year-old; that’s hardly unreasonable, but they might have had an easier time navigating the situation if they had. Complicating matters at United is the fact, underscored in the Wall Street Journal, that the company has quite a few other C-suite vacancies to fill. Munoz is expected to return to work in the first quarter of the new year.