Roche and Novartis are neck-and-neck revenue-wise. They’re fellow citizens of Basel, Switzerland. So, perhaps it’s fitting that their CEO pay packages are quite similar, too.
Novartis chief Joe Jimenez did outrank Roche’s Severin Schwan with total pay of 11.99 million Swiss francs. But the difference, in the scheme of pharma executive compensation, was quite small. Schwan’s 2016 pay package amounted to 11.64 million francs, a difference of just over 350,000 francs.
That’s 3% less. Compare either of their total compensation figures to that of one of the highest-paid biopharma chiefs in 2015—Regeneron’s Len Schleifer, with $47.5 million. Less than one-fourth. Or Johnson & Johnson’s CEO, Alex Gorsky, who’s a perennial entry near the top of FiercePharma’s executive pay list: He racked up $23.8 million in 2015, the most recent figures publicly available. Less than half.
The Swiss drugmakers’ pay reports include line items that are different, so the comparisons aren’t entirely apples to apples. Roche’s “bonus” package, for instance, is made up non-voting securities blocked for 10 years—Schwan is set to collect 2.79 million francs’ worth—while Novartis divides its annual incentive pay between cash and equity. Jimenez’s incentive package, approved Tuesday at his company’s annual meeting, comprised 1.417 million in cash and the same amount in equity awards.
Schwan, on the other hand, collected more cash via his base salary of 4 million francs. Jimenez’s base was just over 2 million.
Meanwhile, the breakdown of their equity grants differed, too. Novartis hands out two types of long-term incentive grants, one that assess performance against the company’s own internal targets, the other that compares results to those at peer companies. For the first, Jimenez got 4.2 million francs; the second yielded 2.62 million.
Roche distributes “Stock-settled Stock Appreciation Rights,” which are equity payoffs based on Roche’s stock performance, and Performance Share Plan awards, which are based on shareholder returns compared with peers. Schwan collected 2.67 million in S-SARs and 1.49 million performance shares.
Together with pension benefits—561,567 francs for Schwan, 160,283 for Jimenez—and less than 100,000 each in other compensation, that brings us to 11.64 million and 11.99 million, respectively. In dollar terms, at Wednesday’s exchange rate, that’s $11.52 million and $11.85 million.
We won’t know for awhile how Schwan and JImenez’s compensation packages stack up against those for other top CEOs in the business. The public filings have only recently begun to roll in. But if history holds, neither of the two Swiss execs will rank among biopharma’s highest paid.
Big Pharma’s higher paid typically run in the $16 million to $25 million range, roughly speaking. Big-time pay is here to stay at Big Biotech companies, too—and some smaller ones, including Vertex Pharmaceuticals, which paid its CEO more than $28 million for 2015. Specialty pharmas have hiked their pay as well: Shire chief Flemming Ornskov scored a big raise to $21 million for 2015, for one, and Horizon Pharma’s Timothy Walbert racking up a whopping $93 million for that year. Stay tuned.