Chairman and CEO, Merck
Total Compensation: $15.46 million
Professional Profile: When Kenneth Frazier, 58, walked away from Harvard Law School, he probably had little idea that he'd turn that degree into a ticket to the CEO's job at Merck & Co. ($MRK). Frazier left the Philadelphia law firm Drinker Biddle & Reath to join Merck's legal department and then worked his way up to EVP and general counsel. In that capacity, he led Merck's defense of the Vioxx litigation and won promotion to president of the company's global human health business. He moved into the CEO's office when 2011 dawned and took over as chairman that December.
Compensation Breakdown: $1.5 million in salary, $3.28 million in stock, $3.8 million worth of options, and $2.5 million in incentive pay, plus $4.32 million worth of pension growth and deferred compensation and $57,850 worth of perks and other compensation.
Company Performance: Merck didn't exactly waltz through 2012. Its biggest-selling drug, the allergy-and-asthma fighter Singulair, lost patent protection and dropped like a paratrooper. That drop put a 30% dent in Merck's sales, a not insignificant problem. But its bigger problem lay in R&D. Its cholesterol drug Tredaptive hit the wall at the FDA, and Merck yanked it from the market in Europe on safety concerns. Its bone drug odanacatib faltered and now won't be ready for FDA review until next year. So its 2% decline in 2012 revenue, now in the past, looks to be followed up by a similarly situated 2013.
Frazier has been a staunch supporter of Merck's R&D efforts. Even in the face of stock downgrades and plenty of doubt, he says he's not expecting to make huge changes in the company strategy. The company's board has backed him up--to the point that they handed him a 16% raise for 2012, including that $2.5 million in incentive pay. In the proxy statement, the committee said Frazier's "strong leadership" helped the company "overcome the significant hurdles we faced in 2012."
Since year's end, Frazier has pulled the trigger on an R&D switch, replacing longtime R&D chief Peter Kim with Roger Perlmutter, a Merck veteran who scored plenty of victories at Amgen ($AMGN) before he left that company in 2011. Next up: overcoming Merck's next round of significant hurdles.
Special Reports: Kenneth Frazier - The 25 most influential people in biopharma today | Merck - Top Pharma Companies by 2012 Revenues | Merck - Biopharma's Top R&D Spenders - 2012 | Vioxx - Pharma's Top 11 Marketing Settlements
New week, new winner in the top pharma settlements contest
Merck execs struggle with growing uncertainty over late-stage R&D
Merck has to trim outlook as pipeline poops out
Merck's Singulair sales free-fall 90% in 4 weeks