The CEO View: Defending a Good Company from Bad Investors

David Pyott, former chief executive officer of Allergan, describes the conditions prior to the hostile takeover bid in 2014 by Pershing Square Capital Management and Valeant Pharmaceuticals. He notes that when investors state that they want more, the CEO has to be clear about what the firm can commit to, and that the shareholders have the option to invest their money elsewhere. Pyott also believes that changing the tax rate from 35% to 20%, it would be more in line with other global markets, and would foster job creation and investment. The high rate also means that corporations are vulnerable to takeovers driven by tax inversion. He feels that a company's shift from shareholder wealth to long-term growth may require new leadership, as it can be difficult for some CEOs to change direction.