|Regeneron CEO Len Schleifer|
Small pharma CEOs are consistently outranking their Big Pharma peers in the pay department. But there's a method behind the madness, or so says Fortune: Execs from smaller companies are paid more like a hybrid of entrepreneurs and blue chip company CEOs, giving them access to more awards and a sweetened pay package.
Most of the execs from smaller biopharmas were paid a base salary of $1.5 million in 2013--pretty standard fare in the higher ranks of the industry--and that, combined with cash bonuses, stock option grants, and other awards, totaled an annual compensation of at least $15 million a year. For a couple, compensation amounted to much more than that.
Take Regeneron's ($REGN) Len Schleifer, for example, who topped FiercePharma's roundup of highest-paid biopharma CEOs for two years in a row. Schleifer took home $36.3 million in total compensation in 2013. Another biotech CEO--Celgene's Bob Hugin--came in second at $21 million. And then there's Gilead's John Martin, Baxter's ($BAX) Robert Parkinson and Biogen Idec's ($BIIB) George Scangos, all of whom made FiercePharma's top 10. Parkinson collected a $16.1 million package, while Martin nabbed $15.45 million and Scangos snagged $15 million, according to FiercePharma research.
Those compensation figures don't count actual stock option profits and vested stock awards, Fortune points out--and those are even more impressive. Gilead Sciences' ($GILD) CEO John Martin raked in $159 million in option profits in 2013, riding high on the company's 350% stock increase in the last five years. But that number pales in comparison to Regeneron's 2000% share price increase during the same period. The eye-popping number accounted for 96% of Schleifer's realized pay, Fortune notes, and more than accounted for the CEO's $70 million in stock profits.
But it's not all smooth sailing for smaller pharma CEOs; AbbVie ($ABBV) doubled Richard Gonzalez's paycheck in 2013 after the CEO nailed key performance targets, but the company's top exec faces a tougher road ahead after its recent failed merger with Shire ($SHPG). Allergan's ($AGN) David Pyott, the lowest-paid CEO in the list compiled by Fortune, spent the past year warding off hostile takeover bids from archrival Valeant Pharmaceuticals ($VRX) and Bill Ackman's Pershing Square.
The exec did not exercise his stock options in 2013 despite a 250% increase in the company's share price over the past 5 years. But all that could soon change, as Allergan's recently announced merger with Actavis ($ACT) could hand Pyott almost half a billion dollars' worth of stock options once the deal goes through, according to the Fortune article.
|Lilly CEO John Lechleiter|
Meanwhile, Big Pharma execs haven't scored quite as impressively. Pfizer ($PFE) CEO Ian Read saw a 4% decline in 2013 pay, though his package still amounted to $17.7 million. Eli Lilly's ($LLY) CEO John Lechleiter has forgone salary increases for 5 years straight--amid flagging sales and layoffs--earning $11.2 million for 2013. But Lechleiter's stock awards during the same year increased by more than $1 million to $6.75 million and his incentive pay dropped only slightly to $2.88 million.
- read the Fortune article
Special Report: 15 Highest-Paid Biopharma CEOs of 2013 - Leonard "Len" Schleifer - Regeneron - Robert Parkinson - Baxter - John Martin - Gilead - Richard Gonzalez - AbbVie - George Scangos - Biogen Idec - David Pyott - Allergan