GB-Business-Free-Type-Analysis (Tableau+Quotes): Titans Of Pharma: Pfizer’s Bourla Tops Big Pharma CEO Compensation League

Every year, Scrip and In Vivo’s Titans Of Pharma infographic spotlights the executive compensation packages at big pharma, lining CEO and R&D chief remuneration up against other company metrics including sales, net profits, market cap and median employee compensation. Explore the interactive dashboard across multiple years and data points. Scroll on down for further charts and analysis.

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The compensation figures provided in our data charts include base salary, bonus and long-term incentives (including equity awards) and are gathered from companies’ official filings. The list encompasses 20 biopharma companies with the highest revenues in the world. However, some companies may be excluded; the current list was compiled based on 2020/2021 data.

Pfizer Inc.’s CEO Albert Bourla was the highest remunerated big pharma CEO in 2022, with a 36% increase in his annual compensation to $33m. AbbVie Inc.’s Richard Gonzalez enjoyed a 10% boost to put him in second place.

Bourla is only the second CEO of a big pharma company to bag more than $30m since Scrip started collecting data on the industry’s biggest companies in 2016. Teva Pharmaceutical Industries Ltd.’s Kåre Schultz received $32.5m for his first full year in the job in 2018.

Bourla has presided over an extraordinary period for Pfizer, during which the runaway success of its two COVID-19 products provided a huge boost to the company’s revenues. His 2022 compensation package boost came on the back of a 16% rise in 2021 and a 17% rise in 2020. Pfizer’s sales rose from $41.9bn in 2020 to $81.3bn in 2021 and $100.3bn in 2022.

It will be interesting to see what happens to Bourla’s compensation package in 2023, with the company recently having updated its annual revenue guidance to $67bn-70bn, as sales of the Comirnaty COVID-19 vaccine and Paxlovid COVID-19 treatment decline sharply. It warned that it may begin a cost-cutting program across the company in if Paxlovid and Comirnaty revenues fall short of expectations in the fall. For now it stands by its forecast of $21.5bn in revenues from the two products in 2023, although their first-half sales were only $8.76bn. (Also see "Pfizer Cost Improvement Program Depends On COVID Outlook" - Scrip, 1 August, 2023.)

Only three CEOs received double-digit percentage increases in 2022, compared with four in 2023. The mean CEO compensation package among the top 18 companies (excluding privately owned Boehringer Ingelheim, which does not disclose executive compensation, and Takeda Pharmaceutical Co. Ltd., which had not reported compensation at time of data collection) was $17.0m, up by 2.4% from $16.6m in 2021.

Once again, US CEO compensation outstripped that of companies based in Europe and elsewhere. Eight of the 10 best paid CEOs lead US companies, with none of the CEOs of European pharma companies in our set reaching higher than eighth place. Unusually, Johnson & Johnson has fallen out of the top 10, with CEO Joaquin Duato debuting in the list in 12th place: his predecessor Alex Gorsky had topped the table in both prior years. While Gorsky took in $26.7m in his final year, 2021, Duato’s package was worth less than half that at $13.1m in 2022.

Duato and Viatris Inc.’s Michael Goettler were the only CEOs of US companies to receive less than the mean in 2022. Merck & Co., Inc.’s CEO Robert Davis had taken that distinction in 2021, along with Goettler. Germany’s Werner Baumann of Bayer AG had the lowest reported compensation package in our set of 20 companies, followed by Denmark’s Lars Fruergaard Jørgensen, chief of Novo Nordisk A/S, and the UK’s Emma Walmsley at GSK plc.

Mean R&D chief compensation rose from $7.0m in 2021 to $7.3m in 2022 (excluding Mads Krogsgaard Thomsen, who left Novo Nordisk in early 2021 and only received $0.6m that year).

The increase was driven by Pfizer’s appointment of William Pao as chief development officer in March 2022: the company provided him with a package worth $17.3m for the part-year. The sum exceeded even the packages previously awarded by J&J to Paul Stoffels, who regularly came top of the R&D chief compensation league table.

Nevertheless, in July 2023, Pfizer announced that Pao, who had previously headed Roche pharma research and early development, was leaving the company as part of a restructure of the R&D leadership. Pfizer’s long-term R&D head Mikael Dolsten got a 12% hike to $12.2m in 2022, and will now take on expanded responsibilities.

The three highest compensated R&D chiefs in 2021 – J&J’s Paul Stoffels, GSK’s Hal Barron and AbbVie’s Michael Severino – have all now left their companies.

Gilead Sciences, Inc. reported the highest median employee compensation in the group of 20 companies, with the figure rising 14.3% this year to $242,033 from $211,687 in 2021 (although still falling short of 2020’s $250,190).

At the other end of the spectrum was Viatris, with median employee compensation of $34,858, down 5.4% from $36,865 in 2021.

Viatris’s low median compensation pushed the company into second place in terms of CEO: median employee compensation ratio, while Pfizer’s position as the company with the highest paid CEO secured its post at the top of that list. J&J slipped down the table as a result of Joaquin Duato taking in significantly less compensation than his predecessor, while AbbVie ascended the table as its CEO compensation rate went in the opposite direction to median employee compensation. As in 2021, Germany’s Bayer and Denmark’s Novo Nordisk were the most restrained when it came to CEO compensation as a multiple of median employee remuneration.