Olivier Brandicourt has been Sanofi's ($SNY) official CEO pick for just 4 days, and already he's in the midst of a controversy. It's all about his pay package, which is generous in European terms, but not unusual in the ranks of global pharma executives.
Brandicourt will collect a €2 million signing bonus up front, and he's eligible for up to €2 million more in January 2016. Then there's up to €4.2 million in cash incentive pay for 2015 performance. That's on top of a €1.2 million base salary, according to a disclosure posted on Sanofi's website. Plus, he'll be eligible for stock and option awards.
|Stéphane Le Foll|
A signing bonus is "not normal at all" in France, according to Ségolène Royal, the country's Minister of Ecology and Sustainable Development. Stéphane Le Foll, spokesman for the government, went a bit farther on RTL News. "It is incomprehensible," Le Foll said (as quoted by Le Monde).
Royal called on Brandicourt to "waive" the welcome bonus, which Sanofi explained as an offset to cash the new CEO would have received had he stayed at Bayer HealthCare. RTL is taking a poll on its website, and so far, 72% of respondents say Brandicourt should give it up.
Brandicourt may take some comfort from the fact that AstraZeneca ($AZN) chief Pascal Soriot caught fire for a signing bonus, too. Awarded £4 million in cash and stock when he joined the company--to compensate for bonuses and other pay he lost when he left Roche ($RHHBY), AstraZeneca said--Soriot immediately took hits from union leaders (who also happened to be shareholders). Another top AZ investor later defended the upfront bonus, saying the company needed the lure to recruit a solid CEO.
The whole brouhaha illustrates the differences between European attitudes toward executive pay and those in the U.S. In FiercePharma's annual ranking of CEO compensation, only the Swiss executives routinely appear near the top, and Sanofi's top exec has made the list only once--and that was because the ranking covered 20 CEOs, rather than the usual 10 or 15. A "golden handshake" bonus isn't uncommon in the U.S., and cash incentive pay can extend into the double digits.
Brandicourt's entire pay package could top CEO compensation at another of France's top companies, the energy company Total. But it falls short of many other Big Pharma pay packages. Pfizer ($PFE) CEO Ian Read's compensation package amounted to almost $19 million in 2013, for instance. As for Soriot, even his signing bonus couldn't vault him into the ranks of pharma's highest-paid CEOs. Brandicourt's predecessor? He collected some $9.6 million in 2012, the year he squeaked into FiercePharma's top 20.
Special Reports: Top 15 highest-paid biopharma CEOs of 2013 | Top 20 highest-paid biopharma CEOs of 2012 - Christopher Viehbacher, Sanofi