Gilead, after 11% revenue increase in 2021, rewards CEO Daniel O'Day with $19.2M pay package

After a good news, bad news year for Gilead Sciences in which revenues swelled by 11% but the company faced increased doubts about its recent M&A moves, chairman of the board and CEO Daniel O’Day nabbed a $19.2 million pay package, the company revealed (PDF) in a Securities and Exchange Commission filing.

It was a slight increase on his $19 million compensation from 2020, when O’Day was still in his honeymoon phase with the California-based company after his hire in December 2018.

O’Day was brought on by Gilead to spark its efforts in oncology. His acumen in that area was demonstrated in his 30 years at Roche. So far, though, his M&A efforts at Gilead have been underwhelming.

A $5 billion deal with Belgian biotech Galapagos has flopped. Another biotech acquisition for nearly $5 billion, that of Forty Seven, looks dubious after its primary cancer drug was put on clinical hold.

And a $21 billion buy of Immunomedics and its breast cancer treatment Trodelvy is now under scrutiny after the company reported successful trial results while curiously withholding data from the study.

Amid its flagging efforts in oncology, Gilead posted a hefty revenue increase in 2021 due entirely to its COVID-19 treatment Veklury, which rang up $5.6 billion in sales. This year, the company has told investors to expect a decrease in revenue by roughly $2 billion.

O’Day’s compensation in 2021 broke down like this: His salary was $1.65 million, a drop from the $1.7 million he made in 2020. His equity awards totaled $13.14 million, up from the $11.51 million he totaled last year. Meanwhile, his cash incentive pay was $3.45 million, down from his 2020 figure of $4.71 million.

In 2019, his first year with the company, O’Day was paid $29.1 million. The hefty package was an inducement, helping compensate for the golden parachute he left on the table after three decades at Roche.

“Our board believes that it is currently in the best interests of Gilead and its stockholders for Mr. O’Day to serve as our (CEO and chairman) because it positions Mr. O’Day to effectively drive future strategy and decision-making for our organization,” Gilead wrote in its proxy. “In addition to public, private and non-profit board experience, Mr. O’Day has a track record of success in highly scientific and competitive therapeutic areas, deep understanding of the evolving healthcare environment around the world and unwavering commitment to driving innovation across all aspects of the business.”

As for Gilead’s other execs, Chief Financial Officer Andrew Dickinson made $6.46 million last year, up from $5.84 million in 2020; Chief Commercial Officer Johanna Mercier collected $6.55 million, down from $7.78 million in 2020; Chief Medical Officer Merdad Parsey, M.D., Ph.D., scored $6.52 million, down from $7.18 million in 2020; and corporate affairs executive vice president and chief counsel Brett Pletcher earned a package of $5.59 million, down from the $5.67 million he made in 2020.