Top-earning directors on the S&P 500? Regeneron and Endo, at $1.4M and up

Regeneron CEO Len Schleifer

Biopharma CEOs pull down some hefty pay packages, with Regeneron ($REGN) chief Len Schleifer topping the list last year at $42 million. But as lucrative as that may be, it's not nearly as much as the highest-paid U.S. CEOs overall.

But biopharma board members? Many of them are collecting compensation that far outranks that of their peers.

According to Bloomberg, Regeneron's 8 outside directors boasted average compensation of $1.9 million last year. The stock-and-cash packages made those directors the highest-paid on the Standard & Poor's 500 Index.

Regeneron says it pays its directors so handsomely because the company itself is doing so well. So far this year, Regeneron shares are up 35%. Its Eylea drug has been one of the industry's most successful launches this decade, and its drug-development projects in partnership with Sanofi ($SNY) count among the French drugmaker's few R&D successes in recent years.

Its board met 7 times last year, Bloomberg says.

Regeneron is just one of the four biopharmas whose director pay ranked in the S&P 500's top 10. Another drugmaker that pays its board members exceptionally well doesn't have as much to brag about. That's Endo International ($ENDP), whose outside directors made an average of $1.4 million, according to Bloomberg numbers.

Endo's shares began 2015 at $72.51, and, at press time, were trading at $62.32. Its revenue for the 12 months ended Sept. 30 amounted to $3.35 billion--not so far short of Regeneron's $3.81 billion for the same period--but its most recently quarterly growth was just 14%, compared with Regeneron's 56%, according to Yahoo Finance stats.

The company has been struggling with generic competition to its Opana pain reliever, and fighting pay-for-delay lawsuits over its alleged attempts to keep copycat forms of that drug off the market. To expand its portfolio beyond its staple pain meds, Endo spent $8 billion in May to buy generics maker Par Pharmaceutical and its portfolio of injectable drugs.

Meanwhile, Vertex Pharmaceuticals ($VRTX) shelled out $920,509 to its outside directors, on average, last year. Its shares stood at $117.80 Thursday, down from $119 at the beginning of the year, and its sales over the last 12 months amounted to $759 million, with 73% growth for Q3. The company recently won approval for its next-gen cystic fibrosis drug Orkambi, which is expected to give its top line a big boost, but its price is controversial at $259,000 annually. Its CEO, incidentally, ranked second on FiercePharma's list of highest-paid in 2014, at $36.64 million in compensation.

As experts pointed out to Bloomberg, directors typically vote on their own pay with little pushback from shareholders. The danger of outsized compensation is that directors' independence might be compromised. "Beyond the smell of self-dealing with their pay, directors may find their interests in getting the ongoing board fees a bit stronger than their willingness to rock the boat," governance expert Gary Hewitt told the news service.

As Bloomberg also notes, not all directors are highly compensated. Warren Buffett's Berkshire Hathaway ($BRK), for instance, pays its outside board members $3,991 a year.

- see the Bloomberg story

Special Report: Top 20 highest-paid biopharma CEOs of 2014 - Len Schleifer, Regeneron - Jeffrey Leiden, Vertex

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