US Pharma CEO Compensation Double That of Europeans

A new report has found that the CEOs of European pharmaceutical companies continue to receive far less than their US counterparts.

The report, from Bloomberg Industries (New York, NY, USA), found that the median salary for the leading pharmaceutical executives in Europe in 2012 was USD 9.3 million, 46% less than the USD 17.2 million earned by CEOs of U.S.-based pharmaceutical companies. Furthermore, the average pay of USD 13.7 million for large-cap pharmaceutical companies was significantly less than the USD 21.9 million paid to the leaders of industrial companies.

Pfizer (New York, NY, USA) CEO Ian Read topped the list with his 2012 compensation of USD 25.6 million, a 2.5% rise from the previous year. According to Pfizer's proxy statement, 90% of Read's 2012 payout was tied to company performance; he was given USD 1.7 million in salary, USD 6.4 million in stock awards, USD 6.5 million in options, and a USD 3.4 million cash bonus. His total compensation also included a USD 7.1 million change in pension value and nonqualified deferred compensation earnings.

That figure was more than five times greater than the USD 5 million paid to Lars Rebien Sørensen, CEO of Novo Nordisk (Bagsværd, Denmark). Another example involves Novartis (Basel, Switzerland) which had to defend against a backlash when it first proposed paying former Chairman Daniel Vasella a USD 78 million noncompete package when he retired; in February 2013, Novartis backed off the payment to Vasella, and he has since left Switzerland for the US.

“Despite the fact that there’s a lot of noise in Europe on top-management remuneration, we’re actually paying less for management teams, by the look of 2012,” said analyst Sam Fazeli, a London-based analyst for Bloomberg Industries. “US CEOs are paid more; if you want to be competitive, then you’ve got to be competitive.”

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