Ongoing controversy around AbbVie’s patenting strategy for Humira didn’t stop CEO Rick Gonzalez from getting a pay bump in 2022.
Big jumps in equity awards more than offset slumps in cash incentive payments and pension value for Gonzalez. AbbVie’s board praised its chairman and CEO for driving “top-tier business performance.”
Gonzalez’s pay increase came just before AbbVie officially started facing U.S. Humira biosimilars at the end of January. The company fought off a Humira antitrust lawsuit at a U.S. appeals court in August but has continued to face criticism over what The New York Times called “legal exploitation of the U.S patent system.” Gonzalez was also among several Big pharma CEOs who had their compensation criticized by Sen. Bernie Sanders during a Senate speech in February.
For its part, AbbVie touted its patient access achievements in Monday’s securities filing, including having offered its medicines at no cost to 198,000 U.S. patients.
Thanks to investor confidence in newer drugs like Skyrizi and Rinvoq for inflammatory diseases, AbbVie’s stock price soared in 2022, driving up the value of Gonzalez’s equity awards at the time of grant. Compared with 2021, Gonzalez’s combined stock and option awards climbed by about $3.2 million to $18.9 million last year.
Gonzalez saw no change to his base salary of $1.7 million. His cash incentives declined by nearly $1 million to $3.9 million, which was only slightly better than what he got in 2018 for the same line item.
In addition, Gonzalez’s travel-related compensation also increased. In 2022, Gonzalez was compensated for about $848,000 in non-business-related air travel, up 50% over 2021’s level.
Moving into 2023, Humira's biosimilar challenge will be a major focus for Gonzalez and AbbVie. AbbVie projected Humira’s U.S. sales will drop 37% in 2023, with the most significant impact from price reductions, Gonzalez noted during the company’s fourth-quarter earnings call last month.
In contrast, AbbVie expects Rinvoq and Skyrizi sales to grow by a combined 45% to $11.1 billion. AbbVie figures the two new immunology blockbusters will fully eclipse Humira’s peak sales of around $20 billion by 2027.
The Illinois pharma giant is also preparing for more diversification plays. AbbVie has removed an internal M&A cap of $2 billion per year, Gonzalez recently told The Wall Street Journal. Successful M&A deals are typically considered achievements for CEOs and often come with pay boosts.