Allergan Vows to Pay Golden Parachute Taxes After Pfizer Deal

Three days before Allergan Plc announced a $160 billion deal with Pfizer Inc. last year, its board sent a message of reassurance to its executive team: if you’re let go after the acquisition closes, we’ll cover the tax bill for your severance packages.

As a result, Allergan could end up reimbursing its five top managers as much as $86 million for taxes they’d have to pay on top of ordinary income taxes if they aren’t offered jobs in the combined company, according to a preliminary proxy filing Friday. The payments were outlined in agreements signed on Nov. 20 last year and are specifically tied to the Pfizer deal.