Seattle Genetics hands helmsman Siegall $18M, a 110% pay bump. What for?

Pile of money
Seattle Genetics CEO and chairman Clay Siegall saw his 2018 pay package leap 110%, reaching $18.1 million.(Getty/urfinguss)

Percentage-wise, Seattle Genetics CEO Clay Siegall probably scored the biggest raise among the industry's top-paid executives last year. And his $18.1 million total dwarfed many a Big Pharma chief's compensation, too.

The Seattle Genetics co-founder, president, CEO and chairman saw his pay package more than double to $18.1 million in 2018, versus $8.6 million in 2017, according to a company filing with the U.S. Securities and Exchange Commission.

Every line item of compensation increased: base salary, option and stock awards, cash incentive pay and all other compensation, which included the cost of an award trip with top Adcetris sales performers. He also scored a 20th anniversary bonus.

Siegall’s base salary increased 3.5%, in line with the company’s practices in previous years. But his stock and option awards skyrocketed. He nabbed $8.22 million in stock, compared with $3.56 million in 2017, and his options came in at $7.54 million for 2018, up from $3.22 million.

The executive’s cash incentive pay got a boost from Adcetris sales growth and development progress. In March, the drug nabbed a new chemo-combo approval in newly diagnosed, late-stage classical Hodgkin lymphoma, an indication Siegall described as the company’s “biggest market opportunity.” And in November, under the agency’s new Real-Time Oncology Review pathway, the drug became the first FDA-approved treatment in front-line peripheral T-cell lymphoma.

Plus, Adcetris brought in $477 million in 2018, a 55% jump over $308 million the previous year. Overall, the company met or beat the performance goals that “were aggressive and set at challenging levels,” the board said, and decided Siegall’s annual cash incentive should come in at 1.3 times his salary, or nearly $1.2 million.

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On top of that, thanks to a 2016 incentive tied to Adcetris' approval in Hodgkin lymphoma, Siegall nabbed another $212,500 in cash, bringing his nonequity incentive total to $1.41 million. That payoff also came with 37,280 Seattle shares, which helped drive his stock award boost.

His stock awards total also includes a set of shares that hasn't actually been granted yet. Last January, the company shelled out $614 million for Cascadian Therapeutics and its tyrosine kinase inhibitor for HER2 cancers, tucatinib. Under a long-term incentive plan tied to that drug, Siegall is up for incentive grants worth nearly $1 million and granted in two batches. Both were added to his stock awards for 2018, even though the second tranche is yet to come. The first tranche won't vest until the drug wins its first approval.

Siegall’s total pay topped many of his peers, including CEOs serving at some of the world’s largest pharmas. For example, David Ricks, in his second year behind Eli Lilly’s wheel, nabbed $17.2 million in 2018 compensation.

Meanwhile, Roger Dansey, the new Seattle Genetics chief medical officer Siegall poached from Merck & Co. last May, racked up $9.9 million in 2018 pay, with $6.8 million coming from stock awards that included his signing grants.