Whenever Moderna CEO Stéphane Bancel parts ways with the burgeoning vaccine giant, he’ll have a nice separation package waiting.
The company’s board of directors has approved a golden parachute for Bancel worth more than $926 million, his reward for a guiding Moderna as it successfully developed and supplied a COVID-19 vaccine. The windfall was reported this week in the company's 2022 proxy statement.
During its transformational year, Moderna's revenues went from $803 million in 2020 to $18.5 billion last year as it manufactured and delivered more than 807 million doses of its mRNA shot. Moderna expects to make even more this year, projecting vaccine sales of $22 billion.
Before the pandemic, Bancel’s “change-in-control” package amounted to $9.4 million. But that changed with Moderna’s star turn. His new deal includes stock worth $922.5 million, a severance payment of $1.5 million and a bonus of $2.5 million if the company is sold or if he is fired.
The proxy report showed that Moderna's compensation for executives is closely tied to the company’s equity.
The golden parachutes for other Moderna executives are similarly structured. President Stephen Hoge’s package, for example, clocks in at roughly $160 million, while chief technical officer Juan Andres’ comes in at more than $53 million.
Bancel collected $18.2 million in total compensation last year, a leap from the $12.9 million he made in 2020 and $8.9 million in 2019. Hoge made $7.8 million last year, while Andres’ compensation came in at $6.6 million.
Moderna recently changed its compensation peer group, which is a list of similar companies that a firm uses to make sure its own executive benefits are competitive in the market.
While its peer group used to include large biotechs such as Alnylam, Sarepta and Incyte, those in Moderna's new upscale neighborhood are Big Pharmas such as AbbVie, Bristol Myers Squibb, Eli Lilly, Merck, and Pfizer. The new peer group takes effect for setting Moderna execs’ pay in 2022.
Starting in 2021, Moderna also introduced a performance-based share unit plan, which for Bancel made up 25% of his total stock award. These shares are tied to Moderna’s performance during a three-year period and “focus on pipeline development goals that support our long-term strategy,” Moderna said in the filing. As the company noted, such awards only convey value if its stock price rises.
“Our executive compensation program is guided by our overarching philosophy of paying for demonstrable performance and impact,” the company wrote. “We are focused on our mission to ‘Deliver on the promise of mRNA science to create a new generation of transformative medicines for patients.’”
Aside from its pandemic efforts, Moderna earlier this week rolled out plans to start testing vaccines against 15 top infectious pathogens by 2025.