The CEO of Aceto Corp. has been terminated now that the Port Washington company has sold most of its assets in auctions supervised by a U.S. bankruptcy court, according to a securities filing.
William C. Kennally III was terminated on May 31 but will continue to serve on the Aceto board of directors, the company said in documents filed Monday with the U.S. Securities and Exchange Commission.
He will receive $768,000 in severance from the generic drugs manufacturer and seller of chemicals under an agreement reached in April after Aceto filed for Chapter 11 bankruptcy protection from its creditors.
Kennally was eligible for more severance but agreed to a lesser sum so the company could take a tax deduction and he wouldn’t have to pay excise tax, the securities filing states.
“As a result of the company’s disposition of its operating assets in April 2019, the company no longer requires the services of William C. Kennally III, the company’s president and chief executive officer,” the filing states. “Mr. Kennally’s termination constitutes a termination without cause and was not the result of any disagreement with the company on any matter relating to the company’s operations, policies or practices.”
Earlier this year, Kennally received $1.6 million after the successful completion of the asset auctions, according to an April securities filing. His base yearly salary was $650,000, excluding stock grants.
The veteran pharmaceutical executive was named Aceto's CEO in October 2017. He replaced longtime CEO Salvatore Guccione, who had overseen the company's ill-fated expansion into generic drug manufacturing through costly acquisitions.
Kennally spent 37 years at drug giant Pfizer before retiring. He was a member of the Aceto board for about a year when he was tapped to succeed Guccione, who resigned all his posts immediately.
At the time, Kennally said, "Aceto has successfully laid the foundation for its transition to a human health company. I expect to build on that success while exploring and introducing new capabilities to strengthen the company's competitive position in the generics drug industry."
Seventeen months later, Aceto filed for bankruptcy, citing losses from its Rising Pharmaceuticals division in New Jersey. The company had 315 employees as of June 2018, including about 80 in Port Washington, according to its annual report to shareholders.