Teva Pharmaceuticals president and CEO Jeremy Levin announced Wednesday that he
was stepping down after less than 18 months in the role, despite denying reports
he had intended to leave the company just two days earlier.
CFO Eyal Desheh will serve as interim CEO until a permanent replacement is
The stock price of Teva, the largest company listed on the Tel
Aviv Stock Exchange and the world’s largest generic drugs manufacturer, fell
6.6% on the TASE upon news of Levin’s resignation, while its share price fell
7.1% in pre-market trading on the New York Stock Exchange.
Levin, who was
behind a $2 billion cost-cutting plan that would downsize 10% of the company’s
workforce, including 800 employees in Israel, had been at loggerheads with Teva
chairman Phillip Frost over company strategy. According to Channel 2, Frost
opposed conciliatory steps in negotiating with the Histadrut Labor Federation
over the layoffs.
“Differences of opinion emerged between us over
implementation of the strategy. In the past few weeks, we spoke with Levin and
we have decided that it would be better to part ways,” Frost said in a
conference call, following the announcement.
The layoffs aroused
Finance Minister Yair Lapid called Desheh to express
his continued concern over the impending layoffs, and he promised hearings on
the company’s “trapped profits.” Finance Committee Chairman MK Nissan Slomianksy
said, “without specifically responding to Jeremy’s moves, the process suggests
that the company Teva has internalized the size of the crisis, and it is moving
toward a serious streamlining process.”
Former Teva chairman Meir Heth
said the policy was poorly implemented.
“The streamlining could have been
carried out in a far wiser and more dignified way,” Heth told Globes
interview earlier this week. “This was a public relations failure. It’s a shame
that the announcement of the layoffs was not accompanied by an announcement of a
10% pay cut for directors and executives. Had they been smart, they would have
done that, and believe me, they could be reduced.” The company has also faced
criticism over its utilization of tax benefits, which have brought its tax rate
to near nothing.
Eldad Tamir, CEO of Tamir Fishman, argued that the South
African Levin found it difficult to relate to Israel’s business
“Jeremy Levin entered a tough situation at the company – a
situation in which the need for connecting with Israel’s culture, media and
society is critical.”
Levin assumed his post at Teva in May 2012,
succeeding Shlomo Yanai, who had been appointed by then-chairman (the late) Eli
Hurvitz. When Hurvitz resigned, he was succeeded by Frost, who was then vice
chairman, and he subsequently appointed Levin as CEO. Eighteen months ago,
Teva’s board of directors split over the question of its chairman, and the names
of scions of the company’s founding fathers, Chaim Hurvitz and Amir Elstein,
were mentioned as candidates to succeed Frost. In the end Frost (76) was
reelected to another three-year term.
“Since I joined Teva, we have made
tremendous progress in setting a new course for the company,” Levin said
Wednesday. “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
As part of his non-competition agreement approved two months
ago, Levin could be eligible for up to 24 monthly salaries, for a total of $3
million, upon his departure.
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