Report: Exec paid $78M to keep secrets
ZURICH, Switzerland, Feb. 18 (UPI) -- A pay package of $78 million for the departing chairman of drug company Novartis has caused an uproar in Switzerland, observers say.
The New York Times reported Monday that Novartis plans to pay Chairman Daniel Vasella, who is leaving the company, $78 million over six years for not divulging what he knows to rival companies.
Vasella said in a statement that the sum was in line with market value and that he would use the money "for philanthropic activities."
The sum has elicited some harsh criticism, however. Swiss federal Justice Minister Simonetta Sommaruga was quoted as saying the size of the pay was an "enormous blow for the social cohesion of our country."
The sum was "beyond evil," said Christian Democratic People's Party President Christophe Darbellay.
The severance plan was revealed just two weeks before Swiss voters are to decide a referendum that would give shareholders power of deciding executive pay.
Eadington, gambling economist, dies
RENO, Nev., Feb. 18 (UPI) -- William Eadington, a U.S. economist who might be called the father of gambling studies, has died of cancer at 67, a colleague said.
Eadington was graduate school in California, when he went to Aladdin Casino in Las Vegas with a brother-in-law. The trip triggered a lifelong interest in gambling economics.
In 1969, he joined the faculty at the University of Nevada, Reno, only to discover there were few books on the subject in the school's library.
He had expected to find the library "filled with scholarly tomes dedicated to the nuances of gambling," he once recalled.
He was wrong, The New York Times reported Monday.
He began the school's first course on the economics of gambling in 1972 and was the director of the Institute for the Study of Gambling and Commercial Gaming.
"He arrived on campus in 1969 and, for all intents and purposes, invented the field of gambling studies. As subfields began to emerge, he had a hand in those as well," said sociologist Bo Bernhard, who is executive director of the International Gaming Institute at the University of Nevada, Las Vegas.
Eadington launched the National Conference on Gambling and Risk Taking in 1974 and all manner of interested parties showed up from economists to card sharks, from casino owners to experts on gambling addition, the Times said.
He was presented with a lifetime achievement award from the National Council on Problem Gambling, of which he was a board member and was elected to the American Gaming Association's Hall of Fame, a group that includes Merv Griffin, Debbie Reynolds, Wayne Newton and Frank Sinatra.
How can one be honored by both groups? He worked to bring varied opinions in the same room to work on an issue, the Times said.
"There is still much heated rhetoric that argues on one hand that commercial gaming is 'nothing more than a modern form of entertainment,' and on the other that it is 'one of the most pernicious evils to be thrust onto an unsuspecting public, However, the reality clearly lies between these extreme public relations positions," he once wrote.
Reader's Digest files for Chapter 11
NEW YORK, Feb. 18 (UPI) -- RDA Holding, parent company of Reader's Digest magazine, has filed for Chapter 11 protection with plans to turn debt into equity, court papers said.
The company, which was in bankruptcy in 2009, is planning to swap about $465 million of its debt into equity, The New York Times reported Monday.
In court papers, the company said it had about $1.1 billion in assets and close to $1.2 billion in debt. The Times said Reader's Digest had also managed to line up $110 million to keep the company running while in bankruptcy, which it expects to last about four months.
"After considering a wide range of alternatives, we believe this course of action will most effectively enable us to maintain our momentum in transforming the business and allow us to capitalize on the growing strength and presence of our outstanding brands and products," said Chief Executive Officer Robert Guth in a statement.
Reader's Digest downsized after its previous stint in bankruptcy, selling Allrecipes.com and Every Day With Rachel Ray, a home cooking franchise.
Among its obligations, the company listed the Federal Trade Commission, which it owes $8.8 million to cover a regulatory settlement, the Times said.
Shareholders file suit to block Heinz sale
PITTSBURGH, Feb. 18 (UPI) -- Two U.S. shareholders have filed lawsuits to block the sale of H.J. Heinz Co. complaining the price was too low, court papers say.
Papers were filed on behalf of Californian James Clem and on behalf of Hannons Inc., a Maryland company.
Last week, investment firm Berkshire Hathaway Inc. and 3G Capital management said they had reached a deal to buy Heinz for $72.50 per share.
The lawsuits both said that price was "unfair," the Pittsburgh Post-Gazette reported Monday.
"The (Heinz) board ... support the proposed acquisition in order to secure liquidity for their illiquid holdings in the company. From the sale of their illiquid block of shares in the proposed acquisition, the board and company management will receive more than $400 million," court papers say.
The shareholders allege that Heinz's board would not talk with other bidders and included a termination fee of "tens of millions of dollars" in their purchase agreement. That meant Heinz was forced to follow through with the Berkshire Hathaway deal.
A Heinz spokesman declined to comment on the lawsuits, the newspaper said.