7. Richard Gonzalez, AbbVie
2018 pay: $21.27 million
2017 pay: $22.63 million
Richard Gonzalez has overseen quite a transformation during AbbVie’s short history, and the drugmaker again rewarded him in 2018. But Gonzalez’s pay didn’t come without criticism, and he may be the only executive on our 2018 rankings to face direct questioning in Congress about his bonus.
After earning a pay package of $21.27 million last year, Gonzalez joined Big Pharma peers at a congressional hearing on drug pricing in early 2018. At the hearing, Sen. Ron Wyden, D-Ore., asked whether Gonzalez’s pay—specifically his bonus—is tied to sales of AbbVie’s top drug, Humira, which generated nearly $20 billion last year.
“Humira was one element of a set of financial factors that were evaluated as part of my compensation,” Gonzalez said. “It’s obviously a very significant product for us. So it’s clear that would be part of that evaluation.”
In fact, AbbVie’s revenue, income, Humira sales, and more go into determining Gonzalez’s short-term incentive pay, the company’s proxy filing says. And for 2018, that number actually fell a bit—but still came in at almost $4 million.
Last year, Gonzalez’s incentive pay came in at $3.9 million, to be exact, while his salary grew slightly to $1.65 million. His stock and option awards climbed to $14.26 million. All together, his compensation tallied up to more than $21 million.
As AbbVie’s sales have grown in recent years, so too has scrutiny and controversy around the company. Humira is not only the world's biggest drug, but it also drives most of the momentum at AbbVie. It accounted for 61% of the company's sales last year. And as analysts and lawmakers have pointed out, a chunk of Humira's growth has come in the form of price hikes: The drug's sticker has doubled over the last five years, they say.
Competitive threats loom, though, at least outside the U.S. Humira biosims are already for sale in some overseas markets, while in the U.S. the drug won't face copycat competition until 2023, under settlements with a bevy of biosim makers.
Those settlements follow years of wrangling in court over AbbVie's host of Humira patents. Critics say the company built up a patent “thicket” to delay biosimilar competition, using the patenting process and its defense in court to deter competition.
And despite legal challenges, the strategy has worked. Even Boehringer Ingelheim, which had been holding out on settling with AbbVie, finally inked its own deal to roll a Humira copy in 2023 just last month.
All of the scrutiny, litigation and price hikes have left some investors fed up. In early April, AbbVie investor and Rhode Island General Treasurer Seth Magaziner said he supported a shareholder resolution to split the board chair and CEO job after Gonzalez leaves. Magaziner said AbbVie could benefit from more independent oversight, citing concerns with routine price hikes, aggressive patenting and Gonzalez’s $4 million 2018 bonus.