An analysis of 19 prominent pharma companies, including Johnson & Johnson, Pfizer, Lilly, Roche, Merck & Co. among others, revealed that the average stock return was 3.7% points in 2023. (Lilly was the best performing with a return of 59% while Moderna was the worst in the list with a return of –44%.) By contrast, data from a WSJ analysis of more than 400 CEOs across an array of industries, including pharma, showed an average one-year return of nearly 17%. Most companies in their lineup had a return of at least 13% in 2023.
In the pharma domain, the best performers were David Ricks (Eli Lilly) with a total pay of $26.57 million and a stock return of 61.00% in 2023. Lilly has emerged as the fastest growing pharma in recent memory, thanks in part to a rapidly growing metabolic/obesity segment. Another top performer was Reshma Kewalramani of Vertex Pharmaceuticals whose total annual compensation of $20.59 million. Vertex had a stock return of 40.90% in 2023.
Incidentally, there was no clear connection between pharma CEO salaries and stock performance in 2023. In fact, the correlation coefficient between CEO compensation and stock returns was negative (-0.1345) in a dataset of 14 prominent pharmaceutical CEOs.
On the other hand, there were COVID casualties Albert Bourla (Pfizer) with a total compensation of $21.56 million and a stock return of -41.20% in 2023, and Stéphane Bancel (Moderna) with a total compensation of $17.07 million and a stock return of -44.60% in 2023.
While several pharma CEOs like J&J’s J. Duato ($28M) and Lilly’s David Ricks ($27M) were relatively well-compensated across the CEO universe, their pay packages were dwarfed by CEOs in tech, finance and media. Alphabet’s Sundar Pichai ($281M) topped the list. Other standouts were Broadcom’s Hock Tan ($162M) and Blackstone’s Stephen Schwarzman ($120M). See the interactive graph below the table to explore the pay dynamics in pharma and beyond.
Top paid pharma CEOs in 2023:
Joaquin Duato (Johnson & Johnson): Total Pay: $28.42 million
David A. Ricks (Eli Lilly): Total Pay: $26.57 million
Richard Francis (Teva Pharmaceutical Industries Ltd.): Total Pay: $25.71 million
Richard A. Gonzalez (AbbVie): Total Pay: $25.66 million
Robert A. Bradway (Amgen): Total Pay: $22.64 million
Daniel P. O’Day (Gilead Sciences): Total Pay: $22.61 million
Albert Bourla (Pfizer): Total Pay: $21.56 million
Reshma Kewalramani (Vertex Pharmaceuticals): Total Pay: $20.59 million
Robert M. Davis (Merck): Total Pay: $20.27 million
Giovanni Caforio (Bristol Myers Squibb): Total Pay: $19.66 million
These pay packages are still far less than what David Epstein, former CEO of cancer specialist Seagen (acquired by Pfizer in 2023) for just a short time in 2022. Epstein, hired in November to help execute Seagen’s $43 billion sale to Pfizer, received a $57.46 pay package according to an SEC filing. This equates to over $1 million per day over his brief tenure. Epstein’s predecessor, Clay Siegall, also collected $32.76 million in 2022 despite leaving the company in May.
Those figures still fall short of the best-paid chief executives in other industries. Outside the pharmaceutical industry, the best performers were Jensen Huang (Nvidia) with a total compensation of $34.17 million and a stock return of 215.10% in 2023, Mark Zuckerberg (Meta Platforms) with a total compensation of $24.40 million and a stock return of 194.10% in 2023, and Dara Khosrowshahi (Uber Technologies) with a total compensation of $24.25 million and a stock return of 149.00% in 2023.
CEO
Company
Total Pay (Millions)
Industry
Sundar Pichai
Alphabet (GOOGL)
280.62
Technology
Hock Tan
Broadcom (AVGO)
161.83
Semiconductors & Semiconductor Equipment
Stephen Schwarzman
Blackstone (BX)
119.78
Financial Services
Tim Cook
Apple (AAPL)
63.21
Technology Hardware & Equipment
Elon Musk
Tesla (TSLA)
56.00
Automotive
Theodore Sarandos
Netflix (NFLX)
49.83
Media & Entertainment
David Zaslav
Warner Bros. Discovery (WBD)
49.70
Media & Entertainment
Marc Benioff
Salesforce (CRM)
39.64
Software & Services
Jamie Dimon
JPMorgan Chase (JPM)
35.09
Banks and financial
Jensen Huang
NVIDIA (NVDA)
27.12
Technology
J. Duato
J&J
28.42
Pharmaceuticals
David A. Ricks
Lilly
26.57
Pharmaceuticals
Richard A. Gonzalez
Abbvie
25.66
Pharmaceuticals
Giovanni Caforio
BMS
25.66
Pharmaceuticals
Richard Francis
Teva Pharmaceutical Industries Ltd.
25.71
Pharmaceuticals
Robert A. Bradway
Amgen
22.64
Pharmaceuticals
Daniel P. O’Day
Gilead
22.61
Pharmaceuticals
Albert Bourla
Pfizer
21.56
Pharmaceuticals
Reshma Kewalramani
Vertex Pharmaceuticals
20.59
Pharmaceuticals
Robert M. Davis
Merck
20.27
Pharmaceuticals
Giovanni Caforio, M.D.
Bristol Myers Squibb
19.66
Pharmaceuticals
Stéphane Bancel
Moderna
17.07
Pharmaceuticals
Hervé Hoppenot
Incyte
16.66
Pharmaceuticals
Filed Under: Drug Discovery and Development Tagged With: CEO pay, executive compensation, industry comparison, outliers, pay vs performance, pharmaceutical industry, stock performance
In the pharma domain, the best performers were David Ricks (Eli Lilly) with a total pay of $26.57 million and a stock return of 61.00% in 2023. Lilly has emerged as the fastest growing pharma in recent memory, thanks in part to a rapidly growing metabolic/obesity segment.
The median S&P 500 employee earned $81,467 in 2023, up 5.2% from 2022. As a result of CEO pay increasing at a higher rate than the median employee, the CEO Pay ratio increased from 185 in 2022 to 196 in 2023.
Ricks' 2023 compensation of $26.6 million marked the executive's highest total to date, and it came during a period of strength for Lilly: The company's global sales climbed 20% last year thanks to its immensely popular offerings in diabetes and obesity.
CEOs often receive base salaries well over $1 million. In other words, the CEO is rewarded substantially when the company does well. However, the CEO is also rewarded when the company performs poorly. On their own, large base salaries offer little incentive for executives to work harder and make smart decisions.
While the disclosure requirements for how companies treat their workers are limited, publicly traded companies have been required to disclose their median employee-to-CEO pay ratios since 2018. In 2023, the average CEO-to-worker pay ratio for S&P 500 companies was 268-to-1.
The CEO-to-worker pay gap grew in the last year as company boards scrambled to keep executives from quitting and businesses fared well in the stock market. In 2022, CEOs made roughly 185 times their typical worker; with the jump in 2023 numbers, CEOs now make roughly 196 times their employees.
Roche CEO Severin Schwan collected total pay worth 11.49 million Swiss francs ($12.48 million) last year, the company said in its annual report published Thursday. The helmsman took home a 4 million Swiss franc salary, plus a bonus worth 8 million Swiss francs.
Brian Tyler brought in a total of $20,221,325 in 2022 as CEO of McKesson, where he has worked for over 25 years. Median employee pay, by contrast, was $68,844. The pharma reported total revenue of $276.7 billion in 2022, an increase of 5% from the year before.
Novo Nordisk is currently making Danish business history with its financial results, and the CEO, Lars Fruergaard Jørgensen, is being rewarded for it. He will be paid a total of DKK 68.2m (USD 9.9m) for his work in 2023, according to Novo Nordisk's recently published remuneration report.
Novartis handed its CEO Vas Narasimhan 13.3 million Swiss francs ($15.3 million) in total compensation for 2023, according to the company's annual report (PDF). At grant value, the pay is 21% more than what he earned the year before.
Last year, Bristol-Myers' median pay stood at $112,174, the highest among all Big Pharmas that have reported such data. It marked a 1.2% increase from 2017. But of course, as we summarized in the introduction to this report, cross-company comparisons can be problematic.
Merck. Merck CEO Robert M. Davis took home $20.3 million in 2023, up 9% year-over-year. Davis' pay has steadily increased over the years, rising from $13.7 million in 2021 to $18.6 million in 2022.
The median CEO total direct compensation across the entire survey population is $425,000. However, for companies with revenue under $50 million (Cousins Incorporated's size), the median total direct compensation is $280,000.
A typical executive compensation package has financial and non-financial components. They are salary, benefits, bonuses and equity. Commonly, an executive would get more amount of equity than a normal worker and a normal worker quite often wouldn't get any equity in a private company.
Mid-size companies usually pay between $150,000 and $200,000 per year. CEO total compensation packages may also include bonuses and stock options that can significantly impact their overall earnings.
Founder salaries depend on a number of factors, like funding level, location, company size, and the founder's personal financial needs. In 2023, the average startup founder's salary was around $148,000 per year.
An analysis of 343 U.S. large capital companies by ISS-Corporate, an advisory firm, concluded that median U.S. CEO pay is $15.7 million, which accounts for a median CEO pay increase of 9.2% during the 2023-2024 proxy filing season.
The CEO pay ratio is calculated by dividing the CEO's compensation by the pay of the median employee, meaning half of a company's workers make more and half make less.
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