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20 Highest-Paid Biopharma CEOs of 2012

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Call it a rite of spring. Every year about this time, FiercePharma takes a look at executive compensation in the industry, and we rank the highest-paid CEOs. If you're a regular reader, you'll notice that this year's list is longer than previous editions. And there's a reason for that: curiosity.

As we were beginning to gather numbers from biopharma companies' proxy statements and annual reports, news surfaced that Valeant Pharmaceuticals ($VRX) and Actavis ($ACT) had been in merger talks. The former CEO of Mylan ($MYL), one of Actavis' rivals, regularly appeared on our highest-paid executives list, so we looked up the numbers on Actavis. No dice; CEO Paul Bisaro may have pulled off his biggest merger ever last year, but $8.66 million in compensation still didn't qualify him for our ranking.

Then, we pulled out Valeant's proxy statement. And while CEO Michael Pearson didn't earn enough in 2012 to make the cutoff--his compensation just surpassed $6 million--he should have been at the top of the list last year. Pearson's 2011 pay package broke $36 million. He collected more than $18 million in stock and option awards, plus a special $13.7 million dividend payment, stemming from agreements negotiated years before.

We hate to miss a scoop. Naturally. So, we vowed to avoid making the same mistake this time around. Rather than limit our executive-pay search to the biggest pharma companies and biotechs, plus the usual suspects who often make CEO-pay rankings, we used a bigger net. We collected compensation information from 50 companies, including numbers for CEOs, CFOs, R&D chiefs and other top executives.

Partly because of this search, but mostly because of big bonuses and awards at fast-growing Regeneron ($REGN), we have a brand-new No. 1 on our list. That's Regeneron CEO Leonard Schleifer, whose 2012 compensation totaled $30.047 million. You'll notice some other newbies, such as Leonard Bell from Alexion ($ALXN), whose pay bump put him in 12th place. And then there are familiar faces, such as Pfizer ($PFE) CEO Ian Read; Johnson & Johnson's ($JNJ) former chairman and CEO, William Weldon; and Eli Lilly ($LLY) CEO John Lechleiter, who hung on in 10th place.

Many of the companies we researched pay their top people far less than the $10 million that served as our cutoff figure. Novo Nordisk ($NVO) CEO Lars Sorensen, who has presided over double-digit growth there for several years, collected a package of cash and stock awards worth about $5 million for 2012. GlaxoSmithKline ($GSK) CEO Andrew Witty made less than $6 million himself; he took a pay cut for the year because of Glaxo's shortfall on certain performance targets.

And then there are others who would have made the list, had their titles been different. There's Regeneron R&D chief George Yancopoulos, whose extraordinary $81 million in compensation shows how much the company appreciates its newly minted blockbuster, Eylea. There's Mylan Chairman Robert Coury, who used to be a fixture on our list until Heather Bresch took over as CEO; he made more than $28 million last year. Novartis' ($NVS) former chairman Daniel Vasella could have qualified for 12th place with his $13.98 million in compensation.

Vasella, then, gives us a quick segue to the ongoing debate over executive pay. In Switzerland, populist dismay at some high-profile compensation figures led to a public vote earlier this year. Citizens voted in new restrictions on common bonuses, such as golden parachutes, and gave shareholders a binding vote on executive pay. And local analysts figure that late-breaking news of Vasella's behind-the-scenes noncompete agreement--worth some $78 million over 5 years--helped pay activists to get out the vote. (Vasella ended up refusing the deal, by the way.)

In the U.S., where executives are paid more than anywhere else in the world, shareholders at some companies have successfully lobbied for a greater emphasis on performance pay and against extraordinary bonuses, such as change-in-control payments that send top executives on their way with tens of millions after a merger. Other companies have instituted "say-on-pay" advisory votes for shareholders, but those often end up as rubber stamps for the status quo.

Now, we're interested in what you have to say about executive compensation. Are the CEOs on this list worth their price? What's a supersuccessful new drug worth? Should CEO pay be docked for R&D failures? What about failed launches? Should other, lower-paid executives earn more? Tweet your opinions to @FiercePharma using the hashtag #FPexecpay, leave your comments below or email us. We'll collect your thoughts in a future article.

As always, feel free to send us your thoughts on our coverage. And if we missed a well-paid CEO, be sure to let us know.

-- Tracy Staton (email | Twitter)

For more:
Top 10 Biotech CEO Pay Packages of 2012
Top 10 Pharma CEO salaries of 2010
Top 10 Pharma CEO salaries of 2009
2012's 10 highest-paid Med Tech CEOs
Top 10 Medical Device Industry CEO Salaries for 2011