Bristol-Myers chief's last 'paycheck' as CEO is a doozy at $27M

Lamberto Andreotti

Bristol-Myers Squibb CEO Lamberto Andreotti has had a nice run at the drugmaker, paywise. And as he prepares to move upstairs to the chairman's office--and eventually out the door--he's going out with a bang.

Apparently, a $27 million bang.

Apparently, because according to the company's ($BMY) proxy statement, Andreotti's 2014 compensation amounts to a bit more than that amount, about $7 million more than his 2013 package. But at least some of that increase depends on a new method of calculating the company's long-term incentive pay. With that caveat, here are the details.

Andreotti's 2014 base salary was a respectable $1.7 million, slightly more than several of his Big Pharma peers earned. His stock awards--those long-term incentives--amounted to about $18 million. And his cash incentive pay came in at $5.6 million, a cool $2 million more than he's collected in bonus pay since 2012. Pension increases and other compensation--including use of HeliFlight and NetJets--bring the total to $27,062,382.

Giovanni Caforio

Bristol-Myers' compensation committee explained Andreotti's $22-million-or-so in incentive pay with a few bullet points. Excellent shareholder returns, for one; the proxy says the company's returns beat "many of our peers" and the S&P 500 Index while Andreotti has been CEO.

Enhancing the value of the company's pipeline was another, and that brings one big prospect to mind: the cancer immunotherapy Opdivo, which won FDA approval in late 2014 and already has a new indication to its credit. Optimism about Opdivo may have helped offset delays with Daklinza (daclatasvir), the hepatitis C treatment that recently lost its breakthrough designation from the FDA because rivals had beat it to the U.S. market. Bristol-Myers once again filed for FDA approval--for Daklinza alongside Gilead Sciences' ($GILD) Sovaldi--last week.

The committee also cited Andreotti's succession planning as reason for a financial pat on the back. COO Giovanni Caforio will take the reins at Bristol-Myers on May 5, with Andreotti staying on as executive chairman till August. He'll then step back into a nonexecutive chairman's role. Also due for reward, the proxy says, was finalizing the sale of Bristol-Myers' diabetes business to partner AstraZeneca ($AZN) and handling "structural and operating model changes" at the company, which would have to include an R&D rejig that got Bristol-Myers out of discovery work in three disease areas--including hep C and diabetes--and claimed at least 70 staffers. The aim, the company said at the time, was to focus R&D on Bristol-Myers' most promising fields, including oncology.

As for Andreotti's replacement, the company disclosed earlier this month that Caforio would be in line for an $8.7 million pay package, including a $1.4 million base salary and bonus target at 150% of that figure (with more possible, depending on performance). Stock awards under the long-term incentive plan? Set at $5.235 million, the company said in an SEC filing.

- get the Bristol-Myers proxy (PDF)

Special Report: Top 15 pharma companies by 2014 revenue - Bristol-Myers Squibb | 15 Highest-Paid Biopharma CEOs of 2013 - Lamberto Andreotti, BMS