Bausch + Lomb CEO Saunders Exit: What His Contract Says

Brent Saunders lost the Bausch + Lomb chairmanship on Aug. 10 without triggering his severance rights, because his employment agreement says removal as chairman "for any or no reason shall not constitute Good Reason." Removal as chief executive does count. Sixty-three days later, on Monday, Oct. 12, the company said he and the board had "mutually agreed" that he will leave, and the 2026 proxy statement estimated a qualifying exit as of Dec. 31, 2025 at about $52.2 million. The final terms have not been filed yet.

What Bausch + Lomb Announced Monday

Bausch + Lomb and its parent, Bausch Health, said in a joint release that board chairman Thomas J. Appio is interim CEO, effective immediately, and will remain CEO of Bausch Health. The release said Saunders, CEO since 2023, "and the Board of Directors mutually agreed that Saunders will depart the company." It gave no reason.

Saunders said in the release that the company "is stronger, more focused and better positioned for the future." Both companies also said they expect to raise full-year 2026 adjusted EBITDA guidance, excluding acquired research and development, based on preliminary third-quarter results.

Reuters reported that Citi called the timing of the departure one that "seems sudden." Results are due on Wednesday, Oct. 28.

A Ten Week Sequence

The CEO change is the third step in a sequence that started in August. On Wednesday, Aug. 5, four directors resigned, including lead independent director Thomas W. Ross, Sr., and Appio and three others joined the board. The company's Aug. 6 Form 8-K said the new appointments "were made at the request of Bausch Health Companies Inc.," which it called the company's controlling shareholder. Bausch Health's own Aug. 6 release put its stake at about 87% of the common shares and said the board changes "were requested by Bausch Health." The departing directors got prorated cash fees and full vesting of their 2026 stock units, and Ross got a one-year consulting deal worth $400,000.

On Monday, Aug. 10, Appio succeeded Saunders as chairman, with Saunders staying on as a director, according to an amended Form 8-K filed with the SEC on Aug. 12. Monday's move gives Appio both jobs. By TradeFlock's count, Aug. 10 to Oct. 12 is 63 days.

Why the Chair Change Did Not Trigger Severance

Saunders' February 2023 employment agreement, filed with the company's 10-K, defines Good Reason to include a "material reduction" in his title or duties as CEO, or "removal of Executive from the position of Chief Executive Officer." It then adds that removal as chairman "shall not constitute Good Reason."

That carve-out meant the board could take the chair in August without opening the severance package. Removing him as CEO is a different matter under the same clause. Whether Monday's "mutual" exit is treated as a termination without cause, a Good Reason resignation or something else will only be clear when the company files its separation terms.

What the Proxy Says an Exit Could Pay

The 2026 proxy statement sets out the payout if Saunders is terminated without cause or resigns for Good Reason outside a change in control. It assumes a Dec. 31, 2025 exit and the $17.08 closing price that day:

• cash of $13,600,000, including two times the sum of his $1.6 million salary and his target bonus of 200% of salary;
• stock units of $38,023,787, from prorated 2024 and 2025 awards and full vesting of his 2023 hiring awards;
• stock options of $537,802 and other benefits of $45,078.

The total is $52,206,667. By TradeFlock's calculation, cash is about 26% of it ($13.6 million divided by $52.2 million), and the rest depends on the share price and on performance tests. The proxy table is an estimate on a past date, not a disclosed payment.

The Share Price Problem

The largest of his 2023 hiring awards is not a sure thing. The proxy says those performance units, amended in July 2025, vest on Feb. 23, 2029 at 120% to 330% of target, based on share price hurdles from $26.57 to $39.06 plus a cumulative EBITDA modifier. Under a Good Reason exit, the 2023 units vest "based on actual performance through the termination date."

Bausch + Lomb closed Friday at $17.30 and traded at about $16.23 at 9:47 a.m. Eastern on Monday, according to Yahoo Finance price history, about 6.2% lower by TradeFlock's calculation. Reaching the lowest hurdle from Friday's close would take a gain of about 54% ($26.57 divided by $17.30). How the board measures "actual performance" on Monday will decide much of what the exit is worth.

What This Means for Shareholders

For minority holders, the pattern is clear in the filings. Bausch Health rebuilt the board in August, put its own chief executive in the chair and has now put him in the CEO seat as well, while the company searches for a permanent leader. TradeFlock has tracked other recent handoffs, including Avient's outside hire and Stryker's insider succession, but here the controlling shareholder is making the call.

The next documents to watch are the Item 5.02 filing with Saunders' separation terms, due within four business days, and the Oct. 28 results, where both companies have said they expect to raise guidance.

Cover photo: Albarubescens via Wikimedia Commons, CC BY-SA 4.0 (cropped)