Perseverance has paid off for Novavax.
Execs for the Maryland company, which is on the verge of bringing its first vaccine to the market in its 34-year history, are reaping the benefits.
The company's proxy statement, which dropped last week, revealed more than $116 million in compensation for the biotech’s top five executives, with $106 million of it coming from stock options. CEO Stanley Erck's total pay package for 2020 clocked in at $48 million.
It's an amazing turnaround for a company that entered 2020 with $80 million in cash on hand, only enough to sustain operations for approximately six months.
The situation was so dire that Novavax essentially went all in on the development of a COVID-19 vaccine. In its proxy statement, the company explained that it had to maintain a "compensation program designed to provide incentives that were necessary to retain key employees to avoid disruption" to the company's work on the vaccine.
In fact, the executive team's $106 million in stock options included a set of hefty grants in April 2020, four months before Novavax's COVID-19 vaccine moved into phase 2 testing. Half of the options vest on the one-year anniversary of the phase 2 trial start and the other half on the two-year anniversary, regardless of whether the vaccine wins approval.
Developing a COVID-19 vaccine with moth cells—and with the help of more than $1.6 billion in government funding—has paid off handsomely for the company, even though the shot has yet to win approval in the United States or Europe.
Erck, who's been in command at Novavax since 2009, made $657,181 in salary last year. He collected cash incentive pay of $591,463—a total of $1.25 million.
His windfall came largely from $46.8 million in equity awards, with $44.1 million of that in the form of stock options. The 72-year-old's 2019 compensation package totaled $2.4 million.
His lieutenants also fared well.
R&D chief Gregory Glenn, M.D., who oversaw development of the vaccine, totted up $24.9 million in 2020 compensation, with $24 million in equity awards on top of his salary of $483,443 and cash incentive pay of $362,582. Glenn, who has been at Novavax since 2010, collected $1.9 million in 2019.
Chief commercial officer John Trizzino, who joined Novavax in 2009, raked in $21.3 million, including $20.6 million in stock and option awards. Trizzino made $1.4 million in 2019.
John Herrmann, the company’s chief legal officer, collected $20.6 million last year, with $19.9 million of that in stock and options. Herrmann, who made $1.3 million last year, joined Novavax in 2010 and assumed his current position two years later.
Former CFO Greg Covino, who stepped away from his duties two weeks ago for "personal reasons," made $1.4 million with more than $1.3 million coming in stock and option awards. He was in the position for only five months after his hire in November.
The option values are based on "probable" outcomes and require the company to reach certain milestones, the filing said.
The windfall for the C-suite comes in a year in which Novavax generated $476 million in revenue and invested $747 million in R&D.
In July of last year, Novavax revealed it had received a $1.6 billion grant from the U.S. to develop its vaccine and supply 100 million doses. In February, the company announced a deal to provide 1.1 billion vaccine doses to the COVAX worldwide supply effort.
This week, the company said the U.S. government had added another $147 million in funding support for the vaccine effort.
Novavax last month said it expects to score an FDA emergency use authorization for its COVID-19 shot sometime in May.