Riding high on Teva’s success under its recent “Pivot to Growth” strategy, chief executive Richard Francis—in his first year at the helm of the generics and innovative medicines hybrid—has emerged as one of the industry’s top-paid CEOs for 2023.
Still, Francis’ time at the top of the pay rankings may be short-lived, given that much of his compensation came from a sign-on bonus after he joined as Teva’s CEO on Jan. 1, 2023.
For his work in 2023, Francis took home roughly $25.7 million, Teva said in a Wednesday filing. Francis received $1.6 million as salary, plus a bonus worth $1.5 million, $2.6 million in incentive-based cash compensation and a little more than $1 million in “other” compensation tied to travel, relocation and housing costs.
Francis’ $1.5 million bonus is part of a sign-on cash award of $5 million that Teva is paying out in three tranches, the company said.
The bulk of Francis’ pay—nearly $19 million—came in the form of stock awards dished out to “incentivize him to join the company” and compensate for any pay he might have given up after leaving prior employers, Teva explained.
Francis’ stock-based payout included a $9 million equity grant, plus a $5 million performance share unit (PSU) award and a restricted stock unit (RSU) award worth another $5 million. The RSU award will be paid out in three equal installments over as many years, assuming Francis sticks around as CEO, Teva said.
Meanwhile, Francis’ $1 million haul in the “other” compensation category is quite substantial. That portion of the CEO’s pay package stems in large part from Teva’s expatriate benefits, which seek to keep non-Israeli employees “economically neutral” for the costs associated with living and working outside their home countries, Teva said.
Teva tapped Francis to replace its former CEO Kåre Schultz in late 2022, with Francis formally taking the reins at the company at the start of 2023. Francis came over from his post as CEO at both the gene therapy outfit Purespring Therapeutics and the heart function specialist Forcefield Therapeutics. Prior to his stints at those companies, Francis spent half a decade as the leader of Novartis’ now spun-out generics unit Sandoz.
Just a few months into his tenure, Francis unveiled Teva’s “pivot to growth” strategy, which emphasizes Teva’s commercial and biosimilar portfolios, plus its innovative pipeline and generic drugs, all girded by more focused capital allocation, Francis said at the time.
In particular, Teva is putting many of its chips behind newer branded medicines like Austedo and Ajovy, plus the company’s new long-acting schizophrenia drug Uzedy.
So far, the strategy appears to be paying off.
For all of 2023, Teva generated global revenues of $15.8 billion, representing an 8% increase from 2022, when the company’s $14.9 billion sales haul represented a six-year low.
“All in all, what the pivot to growth strategy shows is when we have the clarity for the company on what we need to do, where we need to do it, how we need to prioritize our time, attention and resources—we can actually move the needle,” Francis said during an interview earlier this year.
Francis’ pay package puts him in the upper echelons of CEO compensation for 2023.
His payout was almost identical to that of outgoing AbbVie CEO Richard Gonzalez, who took home $25.7 million in total pay for his work last year. Gonzalez is set to retire at the end of June, at which point AbbVie’s current chief operating officer Robert Michael will take over as chief executive on July 1.
Francis’ compensation was narrowly edged out by that of Eli Lilly CEO David Ricks, who received a 24% pay boost to $26.6 million for his work in 2023.
Johnson & Johnson’s CEO, Joaquin Duato, is currently sitting at the top of the pay rankings. For his performance last year, the executive pocketed $28.4 million—more than double the $13.1 million he received in his first year as chief executive.