Paying well is one way to lure job seekers in and keep existing talent happy, in biopharma and beyond. And while CEOs often catch the limelight for their multimillion-dollar paychecks, it is every diligent worker that forms a company—and some of them also get paid handsomely.
Here, we rank the top 10 most generous biopharma companies, ranked by median employee pay in 2018. You’ll notice that most of them have just one or a few products and number their employees in the hundreds or one or two thousand.
By comparison, Big Pharma companies may win in terms of size and revenues, but their median compensation is no match for that of these R&D-heavy biotechs. Take AbbVie, with a 30,000-strong team that looks like a traditional Big Pharma. Its median salary was $148,823 in 2018. That number was the highest among large multinationals including Johnson & Johnson, Pfizer, Merck & Co., Eli Lilly, Bristol-Myers Squibb and AbbVie's buyout target Allergan, but came nowhere near the median salary of $216,797 at Jazz—No. 10 on our list.
Presumably, a large, more layered organization could be a drag on median pay as huge companies employ a much wider range of workers paid less than the average bench scientist, from junior sales reps to manufacturing line workers to finance-department assistants. They also operate in countries all over the world, many of them with low labor costs.
Celgene, with nearly 9,000 workers and a market cap over $67 billion as of May 20, is an outlier to that rule. Its median salary was $263,237 last year, ranking second on our list. Other Big Biotechs such as Gilead Sciences, Biogen, Amgen and Regeneron were giving out median pay in the range of $132,930 (Amgen) to $148,904 (Biogen).
Companies that consider themselves peers when evaluating their executives' pay also appear to huddle together on employee pay. For example, Neurocrine considers Alexion, Alnylam, Exelixis, Incyte, Ionis, Jazz and Sarepta among its peers. All eight made our top 10 list, which likely suggests that they're vying for similar talent pools and keep their peers in mind when it comes to employee compensation.
We also reported the CEO-to-employee pay ratio of each company on this list, though employees are more likely to focus on the median pay numbers than the ratio. It’s only natural that people like their pay to be at a similar level to that of their peers but don't feel bad that Bill Gates makes 10,000 times more. But if their own CEO pay ratio widens too dramatically—even though executive pay can fluctuate considerably with the value of equity grants—that could lead them to believe they don’t get a fair share of their company’s growth.
This ranking was made with the assistance of a master list compiled by BioPharma Dive, and we only looked at commercial-stage companies with a market value of more than $5 billion as of May 20. So, Bluebird Bio, still a clinical-stage biotech, slipped through, even though it has a market cap of $6.7 billion and median employee pay of $239,318. Clovis Oncology also didn’t make the cut, as its market cap was $867 million, even though it sells PARP inhibitor Rubraca and boasts median pay of $349,809.
This report provides a glimpse into biopharma companies’ pay levels. But to be fair, we must warn readers that these can be apples-to-oranges comparisons for a variety of reasons, such as the size of the company and the level of outsourcing lower-wage functions. Some companies may focus on the U.S. by licensing out foreign rights. Some have their own manufacturing facilities, while others depend on contractors.
Even when two companies have all the same functions, they can vary widely in the numbers of employees in each department. And the numbers can also depend on how companies calculate their median salary, given the wiggle room provided under SEC rules.