Amgen missed its 2021 revenue goal, but CEO Bob Bradway received a bigger pay package anyway.
Bradway’s total compensation rose nearly 8% to $21.7 million, though not because of cash incentives tied to Amgen’s performance in 2021. Of the total package, Bradway’s salary increased slightly to $1.67 million, but his cash incentives erased that gain and dropped 2% to $3.42 million, a proxy filing (PDF) shows.
By Amgen board’s evaluation, the company met or exceeded all line items used to determine Bradway’s cash incentives except for revenues.
For 2021, Amgen had previously set a revenue goal of $26.23 billion. But the firm came short and achieved only $25.98 billion, leading to an 87.6% payout of cash bonus against that target, which carries a heavy 30% weighting in the assessment.
Amgen blamed the lackluster revenue on COVID affecting patient visits and new diagnoses. But industry watchers have picked apart various problems across Amgen’s portfolio. Amgen made a couple of small acquisitions—$1.9 billion for Five Prime Therapeutics and $900 million upfront for TeneoBio—but analysts from Mizuho and Piper Sandler have argued for more M&A deals to cope with pressure on TNF inhibitor Enbrel.
Revenues aside, progress elsewhere made up for the loss in Bradway’s cash incentives. Most notably, Amgen’s Lumakras won an accelerated approval as the first targeted therapy for KRAS G12C-mutated non-small cell lung cancer.
The company also celebrated Otezla’s expanded indication for mild to moderate plaque psoriasis in the U.S., as well as clinical study milestones for bispecific T-cell engager acapatamab in prostate cancer and early-stage small-interfering RNA therapy olpasiran for cardiovascular disease.
The Amgen board also figured the company roughly doubled its goals on environmental and social responsibilities and digital transformation. In 2021, Amgen announced plans to invest about $1 billion to build two environmentally friendly manufacturing facilities: a product assembly and packaging plant in Ohio and a drug substance plant in North Carolina.
The largest component of Bradway’s pay came from long-term equity awards, which hit $15.9 million in 2021, up from $14.4 million the prior year.
The board approved the increased amount to recognize Bradway’s “successful leadership of the company during the pandemic, as well as of the accelerated Otezla integration, the successful execution of the BeiGene collaboration, and the advancement of new approaches to the business’ activities that support the long-term growth of the company,” it said in the proxy statement.
Eighty percent of the long-term incentive grants are performance-based, and they’re payable over years if certain requirements are met. For 2021, Bradway realized $13.3 million from exercising option awards and another $13.6 million payment from the vesting of stock awards.