If this year's list of highest-paid CEOs in biopharma offers any message from the industry, it's this: Big Biotech is beating Big Pharma.
Long dominated by global behemoths like Johnson & Johnson ($JNJ) and Pfizer ($PFE), this executive-pay ranking now includes almost as many biotechs as pharma companies. Biotech executives occupy 7 slots on this list of 15. And individually, biotech chiefs outranked some of the biggest in Big Pharma. Once again, the world's highest paid biopharma CEO runs a biotech company: Regeneron's ($REGN) Leonard "Len" Schleifer, whose $36 million in compensation has now topped these ranks for the second year in a row.
Then there's Celgene's ($CELG) Robert Hugin, who beat Pfizer's Ian Read by a cool $2 million, thanks to a big leap in options and incentive pay; in fact, Hugin's compensation almost doubled in 2013. Gilead Sciences' ($GILD) John Martin, who presided over the launch of hep C superstar Sovaldi, topped Novartis' ($NVS) Joe Jimenez, if only by a few hundred thousand.
Meanwhile, some of the regulars in the highest-paid world didn't qualify this year. John Lechleiter, Eli Lilly & Co.'s ($LLY) CEO, is one of them. With Lilly's sales floundering under patent losses, the company has frozen salaries, cut bonuses, laid off hundreds of workers--and, thanks to a pension-accounting change, knocked Lechleiter's reported compensation down a notch or two. Lechleiter has also forgone a base salary increase for several years running.
The question is whether Big Pharma is becoming Big Biopharma, or whether Big Biotechs are morphing into Big Pharma companies. Outsize executive pay may be just another sign of that transformation. That, or biotech companies are so much more successful these days that their boards figure their CEOs deserve Big Rewards. Let us know what you think.