David McAvoy
About David McAvoy
David R. McAvoy is Executive Vice President and Chief Legal Officer at Teva (appointed March 2024), age 62, with three decades of legal and compliance leadership in biopharma, including 25+ years at Eli Lilly and GC/CCO roles at Fresh Tracks Therapeutics and Endocyte; he holds a BA (Notre Dame), JD (Indiana University Maurer), and MS in Environmental Science (Indiana University) . Teva’s executive pay is heavily performance-based: 2024 company cash bonus metrics included Net Revenues, Non‑GAAP EPS, and Free Cash Flow (each 25%), all above target, and long-term PSUs paid 123% of target for 2022‑2024 after a relative TSR modifier, aligning incentives to revenue growth, profitability, cash generation and shareholder returns .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Fresh Tracks Therapeutics | General Counsel & Chief Compliance Officer | 2019–2023 | Led legal/compliance at immunology biotech; supported governance and risk management |
| Endocyte | General Counsel & Chief Compliance Officer | 2018–2019 | Legal leadership during oncology portfolio focus; supported transactions and compliance |
| Eli Lilly and Company | Multiple global legal/policy/business leadership roles (e.g., GC Emerging Markets; GC Neuroscience; GC Oncology/GI/Diabetes/Women’s Health) | 25+ years | Broad global business/legal leadership across therapeutic areas and geographies |
Fixed Compensation
| Element | Policy Framework | Notes |
|---|---|---|
| Base Salary | Determined by role, skills, experience, market value, and internal equity | Stable compensation component for attraction/retention |
| Target Bonus % of Salary | Up to 100% for exec officers (CEO up to 150%) | Maximum payout capped at 200% of target (CEO max 133%) |
| Benefits/Perquisites | Health & welfare; executive perquisites may include car, travel, relocation, insurance, security, legal/tax consulting | Expat relocation benefits may include tax gross-ups specific to relocation; no excise tax gross‑ups in employment agreements |
McAvoy’s individual base salary and target bonus are not disclosed; Teva applies the same Compensation Policy framework to executive officers .
Performance Compensation
| Category | Weighting | Metric | Threshold | Target | Maximum | Actual Result | Achievement | Payout Mechanics |
|---|---|---|---|---|---|---|---|---|
| Company Financial | 25% | Net Revenues | $13.6B | $16.0B | $19.2B | $16.8B | 105% | Linear payout; threshold requires weighted avg ≥85% |
| Company Financial | 25% | Non‑GAAP EPS | $2.02 | $2.38 | $2.86 | $2.49 | 105% | As above |
| Company Financial | 25% | Free Cash Flow | $1.6B | $1.9B | $2.3B | $2.1B | 109% | As above |
| Individual | 25% | Role‑specific objectives | — | — | — | Company sets rigorous goals | Role‑specific | Weighted with company metrics; payout curve applies |
| Long‑Term Incentives | Structure | Vesting | Performance Detail |
|---|---|---|---|
| PSUs | 67% of exec officers’ LTI value (CEO 70%) | 3‑year performance period with absolute stock price modifier | 2022–2024 PSUs earned 123% of target after relative TSR modifier (111% revenue metric; 94% non‑GAAP op income; +20% TSR) |
| RSUs | 33% of exec officers’ LTI value (CEO 30%) | Time‑based, 4‑year vesting | Designed for retention and alignment |
| Options | Not granted in the last completed fiscal year | — | Last executive option grants were in 2018 |
Equity Ownership & Alignment
| Policy/Practice | Detail | Implication |
|---|---|---|
| Stock Ownership Guidelines | CEO 6x salary; other executive officers 3x; directors 5x annual cash fee; expected within 5 years of appointment (execs) | Strong alignment; periodic compliance monitoring by HR & Compensation Committee |
| Anti‑Hedging/Anti‑Pledging | Executives and directors prohibited from hedging or pledging Teva securities; applies through one year post‑termination | Reduces misalignment and leverage risk |
| 10b5‑1 Trading Plan (McAvoy) | Adopted Nov 15, 2024; expires Mar 6, 2025; maximum shares subject to plan: 16,741; certain plans include sales solely to cover tax withholding | Potential limited selling pressure; 16,741 is ~0.0015% of 1,146,959,855 shares outstanding as of Apr 1, 2025 |
Beneficial ownership by McAvoy is not itemized in the proxy’s Security Ownership table (NEOs/directors listed separately); group ownership for all directors/executive officers is 5,616,292 shares (<1%) .
Employment Terms
| Provision | Company Policy (applies to executive officers) | Notes |
|---|---|---|
| Advance Notice | Up to nine months’ notice; pay/benefits continue during notice unless otherwise determined | Enhances transition stability |
| Severance (no CoC) | Up to 1x annual base salary + target annual cash bonus (CEO up to 1.5x) upon qualifying termination; may be subject to non‑compete covenant | Market‑median alignment; may include non‑compete payments |
| Change‑in‑Control (Double Trigger) | Additional cash award up to 1x annual base salary + target bonus if terminated within 2 years post‑CoC event (as defined in plan); double‑trigger required | Equity vesting not single‑trigger; double‑trigger structure |
| Benefits Continuation | Medical and life insurance continuation up to 18 months post‑termination | Standard global practice |
| Equity Treatment | Potential acceleration/continued vesting and extended option exercisability post‑termination (plan terms apply); accelerated vesting upon death/disability for PSUs at target, RSUs immediate, options remain exercisable | |
| Clawbacks | NYSE/SEC‑compliant clawback for accounting restatements; broader Compensation Policy clawback for misconduct, confidentiality/non‑compete breaches; 3‑year lookback on restated financials | |
| No Excise Tax Gross‑Ups | Employment agreements do not provide excise tax gross‑ups |
Investment Implications
- Alignment and risk controls are robust: prohibited hedging/pledging, 3x salary ownership guideline for executive officers, multi‑year PSU metrics with TSR modifier, and double‑trigger CoC equity vesting reduce governance risk and improve pay‑for‑performance linkage .
- Selling pressure from McAvoy appears limited: his 10b5‑1 plan covers a maximum of 16,741 shares versus 1.147B shares outstanding (~0.0015%), and certain officer plans are used only for tax withholding, suggesting low market impact from executive sales .
- Retention terms are competitive but not excessive: severance up to 1x salary+target bonus (additional 1x on CoC), benefits continuation, and advance notice up to nine months provide stability without single‑trigger windfalls; the absence of option repricing and excise tax gross‑ups is shareholder‑friendly .
- Execution risk ties to company financial goals: 2024 incentive metrics were exceeded (Net Revenues, Non‑GAAP EPS, FCF) and PSUs paid above target after TSR, indicating disciplined budgeting and delivery; continued adherence to non‑GAAP budget metrics and TSR‑linked PSU design supports durable incentive alignment .