Gilead Sciences didn't bring CEO Dan O’Day on board to usher a COVID-19 antiviral to an FDA approval, but his company’s success in that arena certainly lifted Gilead's fortunes last year. Still, the CEO’s pay package fell quite dramatically year-over-year, thanks to one-time payments he collected in 2019 as an incentive to join the drugmaker.
Gilead awarded O’Day with an $18.99 million pay package for 2020, a significant drop from his 2019 compensation of $29.1 million, the company said in a proxy filing.
Because 2019 was his first year at the company, O'Day that year collected “one-time make-whole payments” that “parallel the form and timing of payments” he forfeited when leaving Roche after three decades.
In 2020, O’Day's pay package included a salary of $1.7 million, plus stock and option awards valued at $11.5 million. He collected cash incentive pay of $4.7 million and other compensation of $1 million.
That “other compensation” category included an annual $750,000 payment under a “deferred compensation plan” that’s intended to compensate the CEO for forfeiting pension benefits he had earned at Roche. That plan is slated to deliver O'Day $3.75 million over the next several years, and is contingent on his remaining with Gilead.
O’Day, a veteran of oncology giant Roche, joined the California drugmaker in March 2019. When the company named him CEO in late 2018, it had faced years of declining revenues thanks to a fall from grace for its once-high-flying hep C business. O’Day is tasked with finding new sources of growth, and oncology is one of his prime targets.
Just as its peers across pharma did, Gilead faced some unique challenges in the pandemic year of 2020—but Gilead saw a chance to pivot. The company quickly identified remdesivir as a potential treatment for the novel coronavirus and ushered the drug through various stages of testing.
Meanwhile, as the drug showed promise, Gilead pumped resources into its manufacturing network to scale up supply. The drug is now used by about half of hospitalized COVID-19 patients in the U.S., Gilead recently said.
The efforts led to an emergency use authorization for the drug in May 2020 and a full FDA approval in October under the brand name Veklury. The med generated $2.8 billion for the year, and the company expects another $2 billion to $3 billion in sales from the drug in 2021.
Elsewhere in Gilead's business, HIV drugs generated nearly $17 billion last year, while hep C drugs chipped in $2 billion in worldwide sales. The company's cell therapies Yescarta and Tecartus contributed $607 million.