After getting a fat check worth $30.5 million for joining Biogen as the CEO in late 2022, Chris Viehbacher saw his 2023 pay drop to $4.1 million as the Big Biotech continues to struggle.
The sharp drop in Viehbacher’s compensation shouldn’t be viewed as an accurate reflection of the Biogen board’s assessment of his leadership, however. That’s because a big part of the 2023 pay was baked into his $30.5 million sign-on package. In connection with his hiring in November 2022, the new CEO at that time agreed not to take any salary adjustments or equity grants for 2023.
Viehbacher received altogether $30 million in stock and option awards in his 2022 pay. Now, all of that is gone. Instead, his $1.6 million base salary and nearly $2.4 million in non-equity incentive awards made up the bulk of his 2023 pay, according to a securities filing.
Viehbacher is tasked to right the ship as Biogen reels from the disastrous launch of the now-abandoned Alzheimer’s disease drug Aduhelm and declining revenue from its flagship spinal muscular atrophy franchise. Biogen made some progress last year, but it still has a ways to go.
For the 2023 cash incentive awards, which are based on Biogen’s business performance, the company’s board is giving Viehbacher a 99% payout against a target that equals 150% of his salary.
For one thing, Biogen’s board-adjusted revenue of $9.68 billion came below a predetermined target of $9.72 billion.
Achievements that Biogen made last year included a full FDA approval—and subsequently confirmed broad Medicare coverage—of Eisai-partnered Leqembi, a follow-on drug to Aduhelm. However, uptake of the new anti-amyloid antibody remains slow as the partners pointed to the need to establish treatment infrastructure.
The FDA last year also cleared Biogen’s Sage Therapeutics-partnered Zurzuvae, although only for a relatively small indication of postpartum depression but not for major depressive disorder. The agency also granted an accelerated approval for Ionis-partnered Qalsody for a small subset of amyotrophic lateral sclerosis patients.
As Biogen reorganizes its internal pipeline, the company has increasingly been looking at external innovation for future growth points. Biogen last year acquired Reata Pharmaceuticals for $7.3 billion and gained the FDA-approved Friedreich’s ataxia drug Skyclarys. The board removed the drug from its adjusted revenue calculation used to evaluate the executives’ pay last year.
The biggest change that Viehbacher initiated last year was perhaps a round of restructuring that aims to cut about 1,000 jobs and save in the ballpark of $1 billion in gross operating expenses by the end of 2025.
The three FDA approvals, a transformation of Biogen’s R&D focus on “value-creating programs” and diversification in immunology and rare disease, the Reata deal, several new executive appointments, plus the reorganization, were cited as Viehbacher’s achievements last year, according to the board’s assessment.
Meanwhile, just as investors were divided on the appointment of the former Sanofi exec, they also couldn’t agree on Viehbacher’s previous compensation plan. At Biogen’s annual shareholder meeting in June 2023, the company’s pay proposal for its executives received less than 70% support. The board, “disappointed with this level of support,” started reaching out to investors for feedback, the securities filing showed.
After having 15 discussions with stockholders who collectively owned 47% of Biogen—including seven investors who voted against the previous pay package—the board decided to increase the weighting of performance stock units in its long-term incentive equity grants to 60% for 2024, compared with 50% in 2023.
For the current 2023 pay, Viehbacher’s and other top execs’ pay packages are up for a non-binding, advisory vote at the company’s upcoming annual shareholder meeting on June 20.