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May 26, 2014

Perks for 24 Biopharma CEOs

Find out how good it is to be the king.

Perks for 24 Biopharma CEOs

Access to a company car and driver are among the benefits of being a CEO for some firms. [© dalaprod - Fotolia.com]

  • Mark Zuckerberg articulated the breakneck-speed culture of Facebook’s startup days when he said a decade ago, “Move fast and break things. Unless you are breaking stuff, you are not moving fast enough.” CEOs are indeed good at breaking things—especially the proverbial bank, judging from this year’s list of 24 CEOs of biopharma giants.

    The 24 are sorted alphabetically, with details of their perquisites and compensation in 2013 not related to salary, stock, incentive payments, or retirement plans, as disclosed by the companies in proxy statements and annual reports filed with the U.S. Securities and Exchange Commission (SEC). CEOs are listed by total 2013 compensation, the top three elements of that compensation, and the figure for “all other” compensation listed by the companies, which often includes disclosures on perquisites.

  • Lamberto Andreotti

    Bristol-Myers Squibb, CEO

    Total 2013 compensation: $20,847,746

    Top three elements: Stock awards, $14,586,898; nonequity incentive plan compensation, $3,799,913; salary, $1,686,539

    All other compensation: $774,396, all of it consisting of company contribution to savings plans. With one exception, a former executive vice president, “We did not provide perquisites and other personal benefits to any other named executive officer that were not otherwise available to all salaried employees,” the company stated in its proxy statement for 2013, adding: “We generally do not provide executive perquisites.”

  • Robert Bradway

    Amgen, Chairman of the Board, CEO and President

    Total 2013 compensation: $13,649,807

    Top three elements: Stock Awards, $7,999,917; nonequity incentive plan compensation, $3,598,000; salary, $1,490,769

    All other compensation: $561,121, consisting of $454,177 in company credits to supplemental retirement plan; $25,500 in company contributions to 401(k) retirement and savings plan; and “Perquisites and Other Compensation” totaling $81,444:

    • $52,653: Personal use of company aircraft1
    • $15,000: Personal financial planning services, including tax preparation services
    • $6,357: Personal use of company car and driver
    • $4,800: Company contribution to nonprofit charities designated by Bradway
    • $2,634: Other expenses, including the cost of executive physicals, expenses related to guests accompanying Bradway on business travel, and gifts
  • Marijn Dekkers, Ph.D.

    Bayer, Chairman of the Board of Management

    Total 2013 compensation: $6,617,388 (€4.832 million)

    Top three elements: Long-term variable cash compensation based on virtual Bayer shares, $2,098,063 (€1.532 million); short-term variable cash compensation, $2,098,063 (€1.532 million); fixed annual compensation, $1,844,707 (€1.347 million)

    Fringe benefits: $53,410 (€39,000), which “mainly includes perquisites such as a company car with driver or the use of the company carpool, payments toward the cost of security equipment, and the reimbursement of the cost of annual health screening examinations,” Bayer stated in its  Annual Report 2013.

  • Roch Doliveux

    UCB, CEO

    Total 2013 compensation: $5,083,629 (€3,712,158)2

    Top three elements: Base salary, $1,862,544 (€1,360,025); long-term incentives, $2,167,933 (€1,583,019); short-term incentive (bonus), paid in 2014 and relating to the financial year 2013, $1,053,297 (€769,115)

    Other components: $3,077,871 (€2,247,453); includes cost of pension, insurance coverage and monetary value of other fringe benefits, including $2,210,127 (€1,613,829) retirement benefit. “Executive Committee members are also provided with certain executive perquisites such as a company car and other benefits in kind,” according to UCB.

  • Kenneth C. Frazier

    Merck & Co., Chairman, President, and CEO

    Total 2013 compensation: $13,375,935

    Top three elements: Stock awards, $5,105,338; option awards, $3,999,998; nonequity incentive plan compensation, $1,620,000

    All other compensation: $232,825, consisting of $179,740 in savings plan company match and credits, as well as:

    • $37,955: Company car and driver
    • $10,000: Financial/tax counseling & tax preparation services
    • $5,130: Installation and maintenance of home security monitoring system
  • Richard A. Gonzalez

    AbbVie, Chairman of the Board and CEO

    Total 2013 compensation: $18,176,794

    Top three elements: Stock awards, $9,246,994; option awards, $3,616,574; nonequity incentive plan compensation, $3,300,000

    All other compensation: $471,614, including $73,532 in earnings and pre-2013 tax payments for nonqualified defined benefit and nonqualified defined contribution plans; $75,000 in employer contributions to defined contribution plan, and other compensation that includes:

    • $297,342: Nonbusiness-related air travel
    • $18,240: Cost of providing a corporate automobile less the amount reimbursed by the named executive officer
    • $7,500: Financial planning
  • Alex Gorsky

    Johnson & Johnson, Chairman/CEO

    Total 2013 compensation: $16,910,960

    Top three elements: Stock awards, $5,988,975; nonequity incentive plan compensation, $4,867,361; option awards, $2,669,999

    All other compensation: $191,779, including $65,423 in registrant contributions to defined contribution plans; $6,125 in insurance premiums; and “perquisites and other personal benefits” totaling $121,231:

    • $72,285: Car and driver for commutation and other personal transportation
    • $46,976: Incremental cost for the personal use of the corporate aircraft
    • $970: Home security monitoring fees
  • Robert J. Hugin

    Celgene, CEO, President, and Chairman of the Board

    Total 2013 compensation: $20,995,785

    Top three elements: Option awards, $8,729,638; nonequity incentive plan compensation, $7,236,693; stock awards, $3,554,100

    All other compensation: $212,854, including $189,375 in employer contributions to the nonqualified plan, “reflecting company matching contributions”; and $19,597 in matching contributions to the 401(k) plan in shared of common stock. In its proxy statement for 2013, Celgene said its Compensation Committee “believes in minimal use of perquisites as they do not reinforce our pay-for-performance philosophy.”3 During 2013, Hugin received:

    • $2,232: Excess liability insurance premiums
    • $1,650: Contribution to health savings account4
  • Joseph Jimenez

    Novartis, CEO

    Total 2013 compensation: $14,820,158 (CHF 13,226,287)

    Top three elements: Long-term performance plan, $6,864,033 (CHF 6,125,823); equity plan “select” shares,5 $4,161,580 (CHF 3,714,124); base compensation, $2,303,050 (CHF 2,055,417)

    Other benefits: $104,939 (CHF 93,652) including unspecified “perquisites and other compensation valued at market price.”

  • Karl-Ludwig Kley

    Merck KGaA, Chairman of the Executive Board

    Total 2013 compensation: $10,012,362 (€7.311 million)

    Top three elements: Variable compensation, $5,935,382 (€4.334 million); Merck long-term incentive plan, $2,532,143 (€1.849 million); fixed compensation, $1,506,407 (€1.100 million)

    Additional benefits: $38,344 (€28,000). “The members of the Executive Board also receive certain additional benefits, mainly contributions to insurance policies as well as a company car, which they are entitled to use privately.”6

  • John C. Lechleiter, Ph.D.

    Eli Lilly & Co., Chairman, President, and CEO

    Total 2012 Compensation: $11,217,000

    Top three elements: Stock awards, $6,750,000; nonequity incentive plan compensation, $2,877,000; salary, $1,500,000

    All other compensation: $90,000, consisting solely of company matching contributions for Lechleiter’s 401(k) plan contributions. “There were no perquisites or payments to report in the proxy statement,” Lilly stated in its proxy statement for 2013, adding: “CEO did not use the corporate aircraft for personal use at any time during 2013.” Lilly stated that its executive compensation programs overall included “very limited perquisites.”

  • Jeremy Levin, D.Phil

    Teva Pharmaceutical Industries, President and CEO until October 29, 2013

    Total 2013 compensation: $7,167,546

    Top three elements: Other compensation, $2,433,349; equity-based compensation, $1,374,934; base salary, $1,242,1397

    Benefits and perquisites: $847,681, which according to Teva “may include payments, contributions and/or allocations for savings funds, pension, severance, vacation, car or car allowance, medical insurances and benefits, risk insurances (e.g., life, disability, accident), phone, convalescence pay, relocation, payments for social security, tax gross-up payments and other benefits and perquisites consistent with Teva’s guidelines.” In Dr. Levin’s case, the company said, “Benefits and perquisites” also include payments and benefits associated with his move to Israel. Additional expenses not counted as part of “Benefits and perquisites,” or expenses for which a category of compensation was not specified, include:

    • $1,203,125: Cash bonus for 2012, paid to Dr. Levin in 2013 following approval by shareholders at Teva’s 2013 annual shareholders meeting, held August 27, 2013 (counted separately as “Cash bonus”)
    • $1,000,000: One-time signing bonus paid on February 1, 2013, which was conditioned upon his continuous employment through such date (counted as “Other compensation”)
    • $75,000: Payment usable by Dr. Levin to purchase medical insurance
    • $66,318: Payment or reimbursement for rent and the cost of utilities for a family residence, associated with Dr. Levin’s move to Israel. “Associated” payments may include payments such as family visitation travel expenses and medical insurance reimbursement (counted as “Other compensation”)

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