PDL BioPharma's Questionable CFO Exit

PDL BioPharma Inc. (NASDAQ: PDLI) shareholders are going to be scratching their heads trying to figure out what is going on. The company announced after the close on Monday that Bruce Tomlinson has resigned his position as vice president and chief financial officer. When companies lose a CFO out of the blue, investors have to wonder what is happening. The explanation is that the resignation is “due to personal reasons.”

What makes matters worse is that Tomlinson’s resignation is effective as of November 30, 2012. While the company said that it will begin a search for a new CFO, that is not exactly going to offer any reassurance. Here is the “he said, they said” breakdown:

• “On behalf of the team at PDL, I would like to thank Bruce for his contributions and insights and wish him well in his future endeavors,” stated John McLaughlin, president and chief executive officer of PDL.
• “In recent months, PDL completed three transactions related to its campaign to bring in new revenue generating assets, and it has been a pleasure to be a part of PDL and its recent accomplishments,” stated Mr. Tomlinson. “I wish PDL, its team and its shareholders continued success.”

The SEC filing said:

Under the Separation Agreement, Mr. Tomlinson will receive a one-time payment of $112,101.88 pursuant to the 2012 Annual Bonus Plan in exchange for (i) a release and waiver of any possible claims related to his employment with the Company; (ii) an agreement not to solicit, recruit or induce to leave any employee, agent, independent contractor or consultant of the Company; (iii) an agreement not to disparage the Company and (iv) a confidentiality agreement. In connection with Mr. Tomlinson’s departure, all unvested restricted stock awards granted to Mr. Tomlinson have been forfeited and returned to the Company.

No other explanation was offered up. Shareholders do not like when a CFO just departs out of the blue. Without the explanation of family illness, another opportunity, or anything, you have to wonder. The company did not even include the typical “there were no disagreements” in the language.

PDL BioPharma shares closed down 2.3% at $7.72 on the day and shares are down around $7.65 in thin trading volume after the close. This stock has traded in a 52-week range of $5.76 to $8.43.

JON C. OGG