AbbVie CEO Richard Gonzalez has been on the job for just over a year, and already his pay has more than doubled. As chief of the newly minted pharma company, spun off from Abbott Laboratories last January 1, Gonzalez racked up $18.2 million in 2013 compensation, including $3.3 million in incentive pay.
To be fair, Gonzalez' $7.95 million in 2012 compensation covered a period when he wasn't actually running AbbVie ($ABBV) as an independent company. Abbott ($ABT) chose him in October 2011 to take the reins of the to-be-spun-off pharma business, which wouldn't be out on its own for more than a year.
Still, $18.2 million is a hefty figure, outranking most pharma CEOs' pay. And AbbVie is an $18.8 billion company, several billion short of the Big Pharma top 10. Clearly, AbbVie intends to follow in its former parent's footsteps when it comes to setting compensation. Every year, Abbott Laboratories CEO Miles White has ranked at or near the top of FiercePharma's annual list of highest-paid biopharma chief executives. Last year, his $25 million put him in fourth place; at $18-plus million, Gonzalez would have come in sixth.
AbbVie spokeswoman Adelle Infante pointed out that, return-wise, Gonzalez has delivered for the company's shareholders. Return to shareholders amounted to 60% last year, she said--none too shabby for a brand-new pharma company. "Mr. Gonzalez's compensation reflects his performance and leadership during AbbVie's extremely successful first year," Infante said in an email.
Here's how Gonzalez's pay breaks down: $1.5 million in salary; $9.25 million in stock awards; $3.6 million in options; $3.3 million in incentive pay; plus about $500,000 in deferred compensation earnings and other compensation.
According to the AbbVie proxy statement, Gonzalez hit all of his performance targets, including goals for EPS, profits and returns. His non-financial goals revolved around establishing AbbVie's as an independent company, with its own brand identity, strategic road map, and employees fired up about its mission and future--not to mention its own pipeline. In "all material aspects," he achieved all those things, the company's board decided.
Gonzalez has another big year ahead of him. The company has forecast flat sales for 2014--$19 billion--but that's excluding any boost it gets from launching its brand-new hep C franchise. The company plans to ask the FDA to approve its cocktail of treatments next quarter, with a launch before year's end.
AbbVie is widely seen as a top contender for hep C drug sales, in competition with Gilead Sciences ($GILD), which recently submitted its combo pill to the FDA. Gilead has a head start in the marketplace for next-gen hep C therapies, with Sovaldi's launch last year, but analysts see a strong contest between the two. And there's a multibillion-dollar market at stake.
- see AbbVie's proxy statement
Special Reports: 20 highest-paid biopharma CEOs of 2012 - Miles White, Abbott Labs | The 25 most influential people in biopharma - Richard A. Gonzalez
Editor's note: This story was updated with comments from AbbVie.