5. John Milligan, Gilead Sciences

John Milligan resigned suddenly in July, and he's since been replaced by Roche veteran Daniel O'Day. (Gilead China)

5. John Milligan, Gilead Sciences
2018 pay: $25.96 million
2017 pay: $15.44 million
Change: 68%

When it reported John Milligan's 2018 pay, Gilead Sciences took pains to point out two things: Half of his options are underwater, and many of his stock awards aren’t worth anything yet.

That's by way of explaining why Milligan, who resigned suddenly in July, raked in such a big compensation package for his last full year on the job. And a not-so-great year for Gilead to boot.

Milligan racked up (PDF) almost $26 million in compensation for last year, a full $10 million more than he scored in 2017. His salary went up slightly to $1.58 million and his cash incentive pay ticked up to $3.34 million. But his stock and option awards took a flying leap.

Partly in thanks to his "separation agreement" with Gilead, Milligan nabbed share awards worth $9.86 million and options valued at $11.13 million. Some $3.6 million of those share awards Milligan netted as severance, because they’ll continue to vest based on company performance as they would have had Milligan stuck around. Gilead’s right: They’re not new, or cash. The $3.6 million in accelerated options isn’t all new either.

But even without severance, Milligan would have collected compensation of about $16.7 million last year. That’s up from $15.43 million as reported for 2017—an 8% increase. 

RELATED: Gilead Sciences' revenue may be shrinking, but CEO John Milligan just got an 11% raise

And the fact that his options ended the year underwater isn’t so much a justification for Milligan’s $26 million total as a knock against Gilead’s performance under his leadership last year. Hepatitis C sales dropped by $3 billion, thanks to competition and continued payer hardball. Even an outsized performance from its HIV franchise couldn't make up for the hepatitis C decline.

Meanwhile, Gilead's Kite buyout so far has cost more than it delivered. Gilead took an $820 million write-down on that deal after canning one of its CAR-T candidates, KITE-585. Its Yescarta cell therapy, approved soon after the deal closed, has been slow getting off the ground, though Gilead’s hoping to double its $264 million in 2018 sales this year.

By year’s end, the company put out a revenue outlook for 2019 lower than what analysts had expected, and flat at best compared with last year.

RELATED: Gilead's top executives Milligan and Martin stepping down

Gilead is betting its new CEO can turn the tide, and it shelled out millions to recruit Daniel O’Day, who’d been running Roche’s pharma division and, before that, put in years at Novartis.

Gilead handed O’Day $14 million in performance stock units and cash from the get-go to make up for payoffs he left behind at Roche. And for 2019 itself, O’Day’s looking at equity awards of $12 million, a potential cash bonus of $2.4 million, and a base salary of $1.6 million. That’s a total in the annual pay column of $16 million. Grand total? $30 million.

5. John Milligan, Gilead Sciences

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