As Bristol-Myers Squibb presses ahead in oncology and after a big finish in the fourth quarter, CEO Giovanni Caforio is taking home a 10% pay raise for 2017 to $18.7 million.
His stepped-up compensation followed a year in which Bristol-Myers exceeded the CEO's overall revenue target—and beat individual sales targets for a list of key drugs. Caforio was measured on revenue stacked up by BMS' immuno-oncology drugs Opdivo and Yervoy, its anticoagulant Eliquis—which has been snagging share in a competitive market—and its chemotherapy Sprycel.
Caforio's goals weren't limited to revenue, though. The company's proxy filing cited 36 pipeline projects that met "transition milestones," which met another internal target. Investigators also stopped two Opdivo studies early on survival benefits, among other pipeline developments.
Also during the year, the company picked up new indications for Opdivo in the U.S. and elsewhere and kicked off 15 registrational studies, according to the filing. BMS' share prices were roughly flat from the beginning to the end of 2017. As Bristol-Myers details in its proxy, about 90% of Caforio's pay is "variable and at risk," with his $1.58 million in salary representing the remaining 10%.
For the company's performance, he took home $3.9 million in incentive pay. He also collected $12.65 million in stock awards and $550,001 in other compensation. Total, with salary: $18.69 million. In 2016, Caforio's pay package was worth $16.93 million, enough to make FiercePharma's list of top-paid biopharma executives at the No. 14 spot.
That $18.69 million comes in at 169 times the company's median pay, cited as $110,280 in the proxy filing.
Bristol-Myers endured some defeats in 2017, too. In the first half, the drugmaker suffered a lung cancer setback with Opdivo, while archrival Keytruda, the Merck drug, chalked up trial victories. BMS shares slipped in the first half while many other drugmakers posted gains. In the second half, the stock rebounded, however.
Last month, BMS reported that its sales for 2017 grew 7% to $20.8 billion. Eliquis and Opdivo fueled the growth, with sales for those drugs up 46% and 31%, respectively. Eliquis is now the top novel oral anticoagulant by prescriptions in the U.S., according to the proxy, surpassing Johnson & Johnson and Bayer's Xarelto.
Bristol-Myers' new chief scientific officer, Thomas Lynch, M.D., took home $8.3 million, including a $1.4 million recruitment bonus and $4.4 million in stock awards. He joined the company in March 2017.
In the "other" pay section, BMS said the amount represents contributions to savings plans. Additionally, the proxy states that "on occasion, a family member accompanied Dr. Caforio when traveling on the company's HeliFlite account on business." The CEO paid taxes on that benefit that the drugmaker didn't reimburse, according to the filing.
Aside from the commercial side of the business, the company worked to advance its pipeline in oncology. It reported this week that the combo of Opdivo and Yervoy won an FDA priority review in previously treated patients with microsatellite instability-high or mismatch repair deficient metastatic colorectal cancer. A regulatory decision is expected by July 10.
BMS was among a handful of drugmakers to receive executive pay scrutiny from the Interfaith Center on Corporate Responsibility this year. The faith-based investor group has said pharma's executive pay focuses too much on short-term goals such as earnings and revenue, and not enough on R&D. It's requesting a report from BMS, AbbVie, Amgen, Biogen and Eli Lilly about how drug pricing risks are incorporated into executive pay decisions.
In its proxy, Bristol-Myers' board recommended that shareholders vote against the proposal. The company said it takes a thoughtful approach to drug pricing and that such a report would be "duplicative and unnecessary." Caforio's pay package includes components for near- and long-term R&D goals, according to the document. In 2017, the company achieved 31 regulatory submissions and approvals, meeting its goal for that metric, while Opdivo won four new indications.