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Top 17 Paychecks in Big Pharma
by Tracy Staton and Maureen Martino
Few statistics are as hotly debated as CEO pay reports. Investors, analysts, and the just plain curious all want to know how much the head honcho makes--and how one company's chief stacks up against another's. So here for your rubbernecking pleasure are the 17 highest-paid CEOs in Big Pharma. While the names themselves probably won't be a surprise, their pecking order might. For instance, the biggest drugmaker by sales--Pfizer--doesn't have the highest-paid executive, and one of the relatively small fry counts its chief among the top 10.
We've already ranked CEO pay at the industry's top five biotechs, but it's worth noting that if they had been included on this list, Amgen's Kevin Sharer and Genentech's Arthur Levinson would have ranked fifth and sixth behind Wyeth's Bob Essner. Genzyme's Henri Termeer made $14.6 million in 2007, coming in ahead of Merck's Richard Clark, and Gilead's John Martin made $10.8 million, slightly less than Roche's Humer.
For U.S. companies, FiercePharma's numbers are based on total compensation reported in their proxy statements. The numbers include base salary, bonus and "other" compensation in 2007. For overseas companies not required to file proxies in the U.S., we gleaned executive pay information from various press reports. Though we did as much due diligence as we could to make sure these reported totals were apples-to-apples comparisons, there's a chance we may have missed something. Feel free to let us know.
1. Miles White - Abbott - $33.4M
2. Fred Hassan - Schering-Plough - $30.1M
3. Bill Weldon - Johnson & Johnson - $25.1M
4. Bob Essner - Wyeth - $24.1M
5. Robert Parkinson - Baxter - $17.6M
6. Daniel Vasella - Novartis - $15.5M
7. Richard Clark - Merck - $14.5M
8. Frank Baldino - Cephalon - $13.5M
9. Sidney Taurel - Eli Lilly - $13M
10. Jeff Kindler - Pfizer - $12.6M
11. Jim Cornelius - Bristol-Myers Squibb - $11.3
12. Franz Humer - Roche - $11.1M
13. Robert Coury - Mylan - $8.5M
14. Jean-Pierre Garnier - GlaxoSmithKline - $6M
15. Werner Wenning - Bayer - $4.77M
16. David Brennan - AstraZeneca - $4.3M
17. Gerard Le Fur - Sanofi-Aventis - $3.27M
Comments
The most ridiculous part of this is that a CEO is guaranteed a "golden parachute" even if they run the company into the ground, file bankruptcy or are sold, these CEOs get a handsome payout. Most get Insurance for 2 years or so. If you or I get laid off, we cannot even afford COBRA Benefits. Sometimes it is more lucrative for the company to fail.
This is what is wrong with America's Corporate Greed. There are plenty of Harvard, Yale, Cambridge, etc., educated executives that can do these jobs for a fraction of the pay. The board of Directors vote these people in.
I say lower their salaries (which are ridiculously high, even higher than the President of the USA's salary)
and pay a substantial amount extra to those CEOs who deliver a profit. None of these CEOs should have a salary higher than $1 million.
They are expendable, there is plenty of talent out there that could do the job better for a fraction of the cost.
We need reform on this.
The extra money should be used to retain jobs at the lower levels that are disappearing daily with the layoffs while the fat cats at the top swell their bank accounts.
Shame on America, Shame on the Attorneys who negiotiate the CEO's contract, shame on the Board of Directors for hiring these people and lining their own pockets. Shame, Shame, Shame.
Interesting how the European companies CEO compensation is much lower than the US CEOs. This despite the fact that Roche, Novartis and SanofiAventis are among the largest companies. Bottom line: US CEOs are overcompensated both relative to the market and the size/productivity of their firms. Knowing this excessive pay filters quite far down the management tree, there is a heck of a lot of money being spent on overpaid, underperforming excecutives that could be returned to shareholders or ploughed right back into imactful R&D. (the difference between Miles White and David Brennan's compensation alonewould fund ~10+ Phase 1 trials, or one meaningful Phase3 registration study!)
The bottom line is that in a free market system the "invisible hand" does a fairly good overall job in allocating resources. Why don't people complain about Tiger Woods' 2008 $122 million compensation?
Because Tiger is being paid for performance. How many of these guys are? If he messed up as badly as Merck has, he wouldn't be getting anywhere near what he makes.
And Tiger doesn't have a golden parachute. If he were to do something unacceptable, he would be out on his ear.
And how many lives could be affected even if Tiger Woods messed up big time?
Not only is Tiger paid on performance but the majority of his money comes from endorsements from Nike, etc., Once again, it is big Corporate America throwing the $$$ around.
Next? Phelps will be the next golden boy, his manager already has over $60 million in endorsement contracts lined up for him and plans for him to take speech lessons and get dental work.
This is depressing.. CEO pay is too high, unemployment is high, and Michael Phelps is high
Where have all the leaders gone? In a time when big pharma is leading the corporate pack in losses and reduced shareholder value executives continue to be exempt from accountability for the poor performance of their corporation. Instead of finding ways to increase revenues and and grow the bottom line they are getting fat payouts for cost cutting through layoffs and cost efficiencies.
This is a short term solution with long term consequences and is unsustainable. Anyone can cost cut anyone can lay off people anyone can find ways to cut expense. Leaders find creative solutions and are held accountable for their performance. I for one can drive a company into the ground for a lot less than what most of the CEO's are being payed. It about time shareholders hold CEO's accountable and tie their pay to performance much like the employees they have so thoughtfully laid off. Although that would take a decision by the board and well, that means they have to be tied to performance as well.
Couldn't agree more with the last poster!
With a record year of LAYOFFS and the additional 2,400 from Merck and Wyeth combined weeks ago brings the total to around 45,000 employees in 2007 from 10 pharm/biotech companies.
Do you realize the number of people looking for work in 2008 from these 10 companies is equivalent to the number of approximate casualties from the earthquake in China.
Those that haven't been affected directly by the slash of these overpaid corporate executives don't realize the tremendous silent impact this has had on a medium size suburb in the US.
When is someone going to take the helm and make some real impact on our healthcare industry? Politicians continue to say reform is overdue and point the finger at big pharma. These ego maniac CEO's need to realize that we have the largest population of US citizens that require their leadership. Stop taking the easy short road to shareholder profits. Have some courage and make the tough decision. There is no reason, what so ever, why this industry shouldn't be expanding to accomodate the boomers that are in need.
The grossly high pay is concentrated primarily in US CEOs. The pay for heads of GSK, Bayer, Sanofi and A-Z are all relatively lower. The data are consistent with prior observations of a US-EU differential on this point.
Tiger Woods? How about Lebron James at $90 million a year? Plus the team can't even get to the third round of the play offs.
Also remember, most US companies were taken from the Germans in the 1940's, their assets siezed from Hitler, thats why there is Merk, Merk AG, Shering Shering AG, and on and on. Biotech, the United States is light years ahead of Europe, so come up with those drugs for cancer, ms, etc., and you have earned your money in saving lives, hosptial and doctor care. Medicine is 9 cents of every healthcare dollar and has risen less than hospital or physician cost more than any other component, but many complain, for their insurance does not pay it all, they have to pay a copay more than the doctor. People doon't even look at their physician and hospitial bills after a stay. Then you will see why employers are going broke, they can not afford healthcare for the U.S. worker. Its not a CEO at a drug companies salary, pick another cause, for your facts are all screwed up here.
for your information Merck and Schering were German companies seized by the American government. the American took advantage of WWI and WWII and not the other way around
The reason some of these highly paid; poorly performing CEOs get kicked out after years of underperforming is that they usually stack the board of directors in their favor by removing hostile uncontrollable members and replace them with puppets who get paid to keep the CEO in office.
Are you saying that hospitals and doctors are to blame for the rise in healthcare cost? Have you researched that on the average physicians billing for a procedure to insurance companies only receive 40% of what is being billed? The hospitals and physicians are suffering from the surge of uninsurred patients. Who do you think eats the cost?
I don't want our Government to have any authority over what any CEO makes. I think thats called socialism. I think its awful what these CEO's make but we need a better solution than more Government involvement.Havn't they messed up enough already?
why do high compensations upset so many people? I believe it is because they only look at the compensation side and not at the crushing responsibilities that these excutives are bearing. It is not true that these people are acting irresponsibly. As an executive it is not always possible to understand everything that is going on in your organization because your underlings are afraid to tell you the truth and therefore hide important information (or even lie). The pharmaceutical world has become very complex and executives need to find the right balance between strict compliance to regulatory agencies(FDA, EPA, SEC, etc...) and delivering the profits to the shareholders.
Take Fred Hassan. He was a successful J&J executive who became the CEO of Pharmacia and later moved on to clean up the mess at Schering Plough. He has a marvelous record and I am sure his shareholders agree with his compensation package.
...but the thousands of employees he's laid off sure don't!
The problem is bigger than the CEO's compensation. The whole system is screwed up. Stock price is the only determining factor. Productive employees are cast off to show "action" on the part of company management to Wall Street in order to boost stock price. Why are good people fired when the company is showing a profit?
And yes, the payouts are obscene; who needs a golden parachute? Give me a break; any reasonable person should be able to set him/herself up for life after just one year of executive pay. So they get to ruin lives, run the company into the ground, and make off with a sack of cash. There is something very wrong with this system, and I have always considered myself a capitalist.
God help us all if we keep this up.
Anyone who thinks these #'s are too high is purely and simply uninformed....They're probably too low because of the screwed up quasi-socialist healthcare system we have here in the USA...the messed up concentration of wealth is on WALL STREET !!!!!!! Many, Many people on wall st make many many many times more than any of these CEO's. Take a look at this: www.forbes.com/2007/05/03/wall-top-earners-lead-07ceo-cx_mo_0503wallstearners_slide.html?partner=msnbc
So this investment guy is making 50 times as much as Abbott CEO. HAHAHA - Think again if you're thinking pay in these businesses is messed up. The crooks are on Wall St controlling the federal reserve. WAKE UP!
The bottom line is performance in any corporation in any private sector industry that has share holders. Performance is the determinant for employees and accountability is the metric. Metrics determine compensation. So why are is this not used to determine CEO performance and compensation. Baseline pay should be a fixed compensation for CEO's according to salary grids and band levels that all corporations use to compensate employees. CEO's are employees not owners or gods. Their job is to ensure shareholder value and steer the company on the right path for immediate and FUTURE GROWTH!!!.
Future growth takes vision which is lacking at the moment and greed has replaced vision. The problems with big pharma started decades ago. Large marketing and promotion budgets with too many me too products. Research took a back seat because profits were abundant and CEO's got fat payouts. The industry over hired sales people with little qualifications and read scripts to doctors on their products. One question and they were lost. Small wonder they got shut out of offices.
So here we are the chickens have come to roost. The industry facing patent loss and empty pipelines now cost cut to maintain viability. The CEO still gets the big salary and stock options and the corporate jet and helicopter. Employees on the front lines get the boot. India, China, Pakistan etc get new plants and investment dollars. America gets the shaft. Well we all have to learn to tolerate melamine with our drugs in the future.
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