Amgen CEO Bob Bradway racked up a 2018 pay package of $18.6 million, his first big raise since 2015, thanks to incentive pay that jumped by about $1.2 million. And the company credited sales growth, earnings and some pipeline progress for the compensation boost.
All told, Bradway's 2018 pay amounted to a 10% jump over his 2017 haul of $16.90 million, Amgen said in a proxy filing. His salary grew minimally to $1.57 million, while his annual incentive bonus grew to nearly $3.9 million from $2.7 million. Bradway’s stock and option awards each grew, though not as much; they came in at $8.75 million and $3.75 million, respectively.
The total puts Bradway among the six highest-paid CEOs in biopharma so far, behind Pfizer's former chief, Ian Read, and just ahead of Eli Lilly helmsman David Ricks.
Amgen's new executive vice president of global commercial operations, Murdo Gordon, didn't come in too far behind Bradway, thanks to some extras he nabbed when he signed on from Bristol-Myers Squibb last September. His 2018 pay package was worth just over $14 million, including a $1 million salary that was pro-rated to $330,000, nearly $10 million in stock awards, a $2 million bonus and more than $1.3 million in “other” pay, which included moving expenses from New Jersey to Thousand Oaks, California.
Bradway led the company to beat its own revenue and earnings benchmarks for 2018, Amgen said in its proxy, touting $23.75 billion in revenue for the year compared with a $21.99 billion target set for compensation purposes. Net income beat his goal, too, at $9.6 billion compared with an $8.68 billion target.
But Amgen fell short in boosting sales of three key launches: the cholesterol drug Repatha, which has been a tough sell despite a couple of price cuts; its bone drug Prolia; and its multiple myeloma therapy Kyprolis.
On the R&D side, Amgen moved two programs into late-stage development and started 10 new first-in-human studies, among other developments, the proxy states. And it wrapped up FDA filings for several drugs, including new uses for the bone drug Xgeva and cancer therapy Blincyto. The proxy also lists Aimovig's FDA filing, just days after the company sued Novartis over their marketing partnership on the med.
Bradway's stock awards came in the form of performance-related grants that pay off according to three-year goals and vest over time. Option awards represented $3.75 million of his 2018 pay, and they obviously only have value if the company’s share prices increase after they’re granted.
Bradway’s pay package comes in sixth in Big Pharma’s 2018 pay rankings so far, behind former Gilead helmsman John Milligan, AbbVie chief Richard Gonzalez, Merck CEO Ken Frazier, Johnson & Johnson CEO Alex Gorsky, and Pfizer's Read. Bradway's pay ranks just ahead of what Lilly awarded to Ricks, who totted up $17.2 million last year. Several other Big Pharma and biotech companies haven’t yet filed their proxies, so the rankings may change.
Bradway’s pay bump is his first significant raise since 2015, when his total came in at $16.1 million, up from $13.9 million the year before. And the latest hike followed a year when Amgen's share price grew about 10%.
Looking ahead, though, competitive challenges to some of the company’s big-sellers are picking up steam. Anemia med Epogen and white blood cell booster Neulasta are both facing off against U.S. biosimiliar competition, and generics to Sensipar have launched in recent weeks. Amgen expects 2019 sales to come in lower at $21.8 billion to $22.9 billion.
Amgen has its own biosim unit, though, plus new launches in Aimovig and Parsabiv. Each is expected to generate growth as older meds cede sales to biosimilars and generics.