Celgene chief Hugin nabs $22M for his CEO swan song

Celgene Executive Chairman Bob Hugin
Celgene Executive Chairman Bob Hugin.(Photo courtesy of Celgene)

In his final full year as Celgene CEO, Bob Hugin took a bit of a pay cut from 2014. But his compensation still racked up to $22.5 million, among the highest in biopharma, as the cancer-focused company continued to outclass its bigger rivals on revenue and earnings growth.

Hugin’s base salary inched up in 2015 to just over $1.4 million, after Hugin nabbed a raise in March, but his cash bonus dropped a bit.

For 2015, Celgene ($CELG) revenue fell in line with Hugin’s performance targets--$9.26 billion, right in the range of $9 billion to $9.5 billion. So did earnings, where the target range was $4.60 to $4.75 per share; Celgene delivered $4.71. On his other goals, including R&D milestones for some key drugs, the company beat targets slightly. 


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The upshot? A cash bonus of $2.25 million, plus incentive payouts under previous years’ awards of $5.11 million, bringing non-equity incentive pay to $7.37 million. For 2014, Hugin netted $9.11 million in the same column.

Hugin captured options worth just shy of $8 million, down from $9.61 million in 2014; his stock awards, however, moved upward to $5.43 million from $3.89 million.

Grand total: $22.47 million, down from $24.24 million in 2014.

Next year, Hugin is set for a potential decline in compensation because he stepped out of the CEO role, handing that baton to President and COO Mark Alles. Hugin remains executive chairman, with the same base salary--$1.5 million--but his cash bonus target is now 125% of his salary, down from 150%.

Alles, on the other hand, Alles saw his base salary go up to $1.1 million with his promotion March 1, compared with $871,250 for 2015. His bonus target goes up to 125% of his base salary, compared with 90% in 2015.

Targets for 2016? Revenue of $10.5 billion to $11 billion and EPS of $5.50 to $5.70. That’s another step toward Hugin’s stated goal of $12 billion in revenue by 2017, a prediction he made back in January 2013, though analysts weren’t thrilled with the forecast.

Key to Celgene's short-term strategy--and both Hugin and Alles’ payoffs for the year--are its multiple myeloma meds, the megablockbuster Revlimid and up-and-coming Pomalyst. The company expects as much as $6.7 billion from Revlimid this year, and it recently wrapped up a patent settlement with India's Natco Pharma to keep branded sales coming through 2022.

Pomalyst, already in a head-to-head battle with Amgen's ($AMGN) Kyprolis, faces some new competition from Bristol-Myers Squibb ($BMY) and AbbVie's ($ABBV) Empliciti; Takeda's Ninlaro; and Johnson & Johnson's ($JNJ) Darzalex, which is priced lower than the Celgene med at $135,000 per year. So far, Pomalyst has led the market share race in multiple myeloma patients who've relapsed after two other rounds of therapy, but a bigger market awaits in second-line treatment, and Amgen's Kyprolis was first to move there with an FDA approval in July.

- see Celgene’s proxy statement

Special Report: The top 20 highest-paid biopharma CEOs of 2014 - Bob Hugin, Celgene

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