A few months after joining Sanofi in 2019, CEO Paul Hudson laid out new R&D priorities and cut bait on some operations that weren't delivering. Then, several weeks later, he shook up management.
That revamp began in December 2019. And for the first full year of his effort to revitalize the French drugmaker, the helmsman has collected a pay package worth €11.34 million, or about $13.6 million.
In an annual filing released Thursday, Sanofi said Hudson’s take-home pay came in at €5.63 million last year, including a €1.3 million salary and €2.21 million in incentive pay based on the drugmaker's performance.
Another €1.95 million is the estimated payout from a signing bonus Hudson negotiated before his arrival. Hudson received 25,000 "phantom" shares that will redeem at the end of next month based on current share prices on the Euronext exchange. For Sanofi's disclosure purposes, they're valued at €1.95 million based on recent share prices, but the final payout remains to be seen.
That's the first tranche of his singing bonus. Hudson can collect up to 25,000 more "phantom" shares next year, based on Sanofi's performance in 2021.
On the equity side, Hudson collected about €5.7 million for 2020, bringing his total compensation for the year to €11.34 million. The final package is subject to approval from Sanofi’s shareholders at its annual meeting, set for April 30.
A few months after joining Sanofi as CEO in 2019, Hudson pledged to scale back in the struggling cardiovascular and diabetes disease areas and amp up Sanofi's efforts behind its immunology "pipeline in a drug," Dupixent, plus vaccines and other growth drivers. Dupixent could generate €10 billion per year at peak, he has said.
In R&D, the company’s “play to win” approach means it’s focusing only on candidates with the potential to change practice. Sanofi has identified six drugs in that category, including candidates against cancer, hemophilia and multiple sclerosis.
During the COVID-19 pandemic, the revamping effort started paying off. Amid business challenges elsewhere, Dupixent sales soared 73% in 2020 to €3.5 billion, while vaccines generated nearly €6 billion, a 9% increase from 2019. Overall, Sanofi's sales grew 3.3% to €36 billion last year.
Because the pandemic didn't have a "major impact" on Sanofi's performance, the company didn't weigh any changes to its executive compensation structure. Sanofi has been involved in the pandemic response, but its high-profile vaccine collaboration with GlaxoSmithKline posted weak data in a midstage study last year. The team started a new phase 2 trial in February with an "optimized formulation." Sanofi is also partnered with Translate Bio on an mRNA vaccine, and has signed up to help produce vaccine doses for Pfizer.
Hudson's Sanofi shakeup also includes cost cuts. In December 2019, the company set out to cut €2 billion in annual costs by 2022, but in February of this year it added another €500 million to that target. Sanofi had already managed to cut €1.7 billion off its annual cost base. Its savings plans involve deprioritizing certain businesses and “operational excellence,” executives have said.
Only a handful of drugmakers have released their 2020 CEO pay figures, but Hudson’s total pay package comes in slightly ahead of the $11.6 million compensation package for Novartis CEO Vas Narasimhan, but far behind the $21.5 million for AstraZeneca’s Pascal Soriot and $23.7 million for Eli Lilly’s David Ricks.