How much is a wildly successful drug worth? For Regeneron's top executives, the answer is $140 million. With its vision-loss drug beating all sales expectations for its first year on the market, the company's 5 highest-paid managers won $140,695,118 in 2012 compensation. Some $30 million of that went to CEO Len Schleifer--a tidy sum. But Chief Scientific Officer George Yancopoulos really brought home the bacon, with $81.5 million in cash, stock and options.
|CEO Leonard Schleifer|
Regeneron's ($REGN) vision-loss treatment Eylea, approved in November 2011, went gangbusters last year, snatching market share from entrenched rival Lucentis and spinning out $838 million in sales. Announcing 2012 earnings, Schleifer predicted Eylea would enter the hallowed ranks of blockbuster drugs by year's end.
Explaining the handsome pay packages, Regeneron's compensation committee cited "the extraordinary accomplishments" Regeneron achieved last year, which "substantially exceeded our corporate goals." Besides Eylea's successful launch, the company scored some development points as well, including a new FDA-approved indication and new European approval for Eylea, and priority-review approval for Zaltrap, a colon cancer treatment marketed in partnership with Sanofi ($SNY).
Stock and option awards accounted for most of the executives' compensation, with $26.6 million in options for Schleifer and $21.4 million in options for Yancopoulos. Schleifer also earned a base salary of $1 million and cash bonus of $2.3 million, plus some $116,000 in perqs such as a car allowance, club membership, tax and financial planning services, and insurance premiums. Yancopoulos' package included an $850,000 salary and a cash bonus of almost $2 million.
|CSO George Yancopoulos|
The real zinger for Yancopoulos, though, was a 500,000-share retention bonus, worth $57.3 million. The stock grant's vesting provisions are designed to keep Yancopoulos toiling on Regeneron's behalf through 2017, the company's compensation committee said. The award, made in June 2012, recognized the "critical role" Yancopoulos is expected to play in Regeneron's future success, by developing new indications for Eylea and Zaltrap, and getting new drugs to market.
"The size of the award and its vesting provisions were intended to provide a powerful incentive for Dr. Yancopoulos to remain employed by the Company through at least the fifth anniversary of the date of the award when it vests in its entirety," the committee wrote. Indeed.