AbbVie CEO pads $16M paycheck with $500K in jet travel

AbbVie CEO Richard Gonzalez

Back when AbbVie ($ABBV) was part of Abbott Laboratories ($ABT), CEO Miles White was a perennial chart-topper when it came to compensation. But for the first couple of years after AbbVie's debut as an independent pharma company, its CEO, Richard Gonzalez, didn't quite follow in White's footsteps. Far from it: Gonzalez collected a mere $8 million in 2012 pay.

Not so much anymore.

For 2014, Gonzalez's total compensation amounted to $22 million, according to AbbVie's proxy statement. Yes, the value of his pension accounts for $5 million of that, and with 34 years at the company, Gonzalez has had a long time to accumulate pension value. But then again, so did White.

The more immediate payoff for Gonzalez came in the form of a $1.6 million salary and cash incentive pay of $3.5 million, plus more than $500,000 worth of personal travel on the corporate aircraft. Add stock awards of $8.38 million and options worth $2.76 million--plus company car and other perks--and you get $16.97 million.

That's actually less than Gonzalez collected in 2013, less his pension. Back out the almost half-million in pension and deferred compensation, and his 2013 total amounts to $17.6 million or so.

Explaining Gonzalez's pay, the company's compensation committee cited financial goals--$3.05 in EPS and $19 billion in net sales, for example, both of which AbbVie beat--and some less quantitative measures, such as motivating employees and building a "biopharmaceutical culture."

Notably absent was any mention of Shire ($SHPG), the biopharmaceutical company that AbbVie agreed to buy in 2014 for $55 billion. The deal would have added some solid rare disease operations, as well as a portfolio of marketed brands such as the ADHD med Viibryd, recently approved for binge eating disorder. With AbbVie's best-selling med Humira going off patent in 2016--and biosimilars already working their way through pipelines--the company needed the back-up.

It would also have offered some tax advantages, via an inversion that would have put AbbVie's headquarters in Ireland. And when those tax advantages turned iffy, because of new U.S. Treasury rules, AbbVie backed out of the buy. The deal's collapse cost AbbVie significantly.

But AbbVie had lots of cash remaining for other deals, and earlier this month agreed to buy Pharmacyclics ($PCYC) for $21 billion--a price analysts called "staggering" and "astronomical." Gonzalez maintains that the Pharmacyclics payoff will prove those analysts wrong. He should hope so--his long-term incentive pay probably depends on it.

- read the AbbVie proxy

Special Reports: Top 15 pharma companies by 2015 revenue - AbbVie | The 10 best-selling drugs of 2013 - Humira