Sanofi CEO Paul Hudson takes another small dip in pay to €10.57M

For the third straight year, Sanofi CEO Paul Hudson has seen a slight dip in his compensation. For 2023, Hudson will receive 10.57 million euros ($11.44 million) in total pay, according (PDF) to the company’s annual filing.

That figure is down from 2022, when Hudson’s compensation totaled 10.72 million euros ($11.27 million), though his 2023 pay is an increase when calculated in U.S. dollars using annual average exchange rates.

In his first full year as CEO of the Paris-based company in 2020, Hudson collected 11.34 million euros ($12.93 million). In 2021, his pay came to 10.98 million euros ($12.98 million).

CEOs of major European pharma companies typically are not compensated as well as their counterparts in the United States. In 2022, for example, on a list of the 15 highest-paid CEOs in the industry, 14 were from U.S. companies, with AstraZeneca’s Pascal Soriot cracking the list at No. 15 with his $19 million haul.

The industry's executive pay dynamics may be changing somewhat, however, as AZ recently reported that Soriot collected 16.9 million pounds sterling ($21.3 million) in 2023, while Novartis CEO Vas Narasimhan received 13.3 million Swiss francs ($15.3 million) last year, which was up 21% from his pay in 2022.

As for Hudson, 56, the composition of his pay differed from 2022 as he did not receive a bonus. In 2022 his bonus—which was part of his inducement to join the company in 2019 after serving three years as the pharma chief at Novartis—came to 2.01 million euros.

In 2023, however, accounting for the difference Hudson’s pay was his equity compensation as the valuation of his performance shares came to 6.78 million euros. He was awarded those shares by the board of directors in May of last year.

The 2023 pay for Hudson, 56, included 1.4 million euros in fixed salary, matching his figure from the previous year. His variable pay came to 2.38 million euros, which was up from 2.34 million euros in 2022.

Sanofi bases variable compensation for its CEO on the attainment of five objectives including sales growth, net income, cash flow and operating income margin. Sanofi met each of its objectives above budget. The objective in which Sanofi was most successful was its growth in key assets, the company said in its report, citing a sales boom for anti-inflammatory drug Dupixent and the performance of its vaccines.

In determining CEO compensation, Sanofi bases it on the figures paid to the chief executives of 12 similar-sized companies in the industry, including Amgen, AZ, Novartis, GSK, Bayer, Pfizer and Roche.

“Within this peer group, Paul Hudson’s overall compensation lies in the low range of the second quartile of the compensation paid by the panel companies,” Sanofi explained in its Form 40-F report. “The practices of the main 40 (market cap) companies are also taken into account.”