With the previous year in the rearview and exciting developments already in the mix for 2024, Novo Nordisk’s CEO is taking home a cool 13% raise for his performance in 2023.
In total, Novo’s chief Lars Fruergaard Jørgensen pocketed 68.2 million Danish kroner (around $9.9 million) for the year—an increase over the 60.1 million Danish kroner he took home for his work in 2022.
Of that haul, around $2.6 million came from Jørgensen’s base salary, according to Novo Nordisk’s yearly remuneration report. Pension and benefits contributed another $300,000 or so, while much of the CEO’s pay package came from short- and long-term incentives, which provided the helmsman with an additional $2.5 million and $4.5 million, respectively.
Novo’s short-term incentive program comprises individual executives’ sales performance, operating profit performance, non-financial performance, plus individual targets. For Jørgensen specifically, the CEO’s performance was ranked along metrics of commercial execution, financials, purpose and sustainability and innovation and therapeutic focus, plus individual performance.
Jørgensen knocked it out of the park across the board, winning the maximum payout in all categories save for sustainability and innovation and therapeutic focus, where the CEO was granted 21% of the 25% maximum possible award.
For the entire 12-month period, Jørgensen was credited with “meeting high expectations,” Novo said in its pay report.
“[Jørgensen] leads based on our values, sets a clear strategic direction, is ambitious and collaborates effectively with the Board, his team, and the broader organization,” Novo Nordisk explained.
For the past several years, Novo Nordisk has been nigh unstoppable thanks to its arsenal of GLP-1 medicines in diabetes and obesity.
Last year, the company turned in a stellar performance overall, lifting revenues 36% to 232.2 billion Danish kroner (around $34 billion). For 2024, Novo is looking at slightly lower but still impressive levels of growth—somewhere in the range between 18% and 26%--thanks to added pressure from Eli Lilly’s obesity newcomer Zepbound, plus ongoing supply constraints.
The popularity of Novo’s respective diabetes and obesity blockbusters, Ozempic and Wegovy, has led to persistent supply chokeholds, which the company is still looking to correct in 2024.
“It’s to be expected for quite some time there will be demand that outgrows what can be produced by us and probably by the competition,” Jørgensen said on a recent Novo Nordisk earnings call. Nevertheless, the chief executive said he expects “quite strong” growth in 2024 on top of a “larger and larger base.”
Given Novo's sales performance last year, and that it is selling potential megablockbusters in Wegovy and Ozempic, that 13% increase could, however, look a little underwhelming.
Meanwhile, Novo Holdings—the fund manager operating under Novo Nordisk’s parent company the Novo Nordisk Foundation—made waves earlier this week when it revealed it was paying $16.5 billion to buy out contract manufacturing giant Catalent.
As part of the transaction, Novo Nordisk is slated to acquire three of the CDMO’s fill-finish sites for $11 billion upfront.