Cosmetics and fragrance maker Coty said Elio Leoni Sceti, who was scheduled to become its CEO in about a week, decided not to take the job.
But the company says it will pay him $1.8 million in severance as well as buy back preferred stock he had bought.
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The company said in a news release that Leoni Sceti had "reconsidered" and will not join Coty. It did not disclose a reason for that decision.
Coty said its chairman, Bart Becht, will remain interim CEO.
The company said the severance payment, which is equal to one year's salary, was part of the employment agreement Leoni Sceti signed with Coty in April. The company will also pay about $55,000 to buy back preferred stock he had purchased.
Coty, based in New York, sells fragrances, cosmetics and skin and body care products under brand names including Calvin Klein, Marc Jacobs, OPI and Sally Hansen. Coty's former CEO Michele Scannavini left the company for personal reasons in September.
Leoni Sceti, 49, is the former CEO of frozen foods maker Iglo Foods, the company behind the Birds Eye brand. Investment fund Nomad Holdings bought Iglo earlier this month and Leoni Sceti was replaced as its CEO.
Shares of City Inc. rose 2 cents to $31.46 in midday trading. Its shares have risen more than 85 percent over the past year.