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Insight & Intelligence™ : Apr 15, 2013

CEO Perks

These 18 top dogs have got it good.

As Mel Brooks has said, “It’s good to be the king!” How good is it to be a CEO? You know what the top 10 biopharma CEOs are making; now, here is a list of 18 CEOs of biopharma giants sorted alphabetically, with details of their perquisites and compensation in 2012 not related to salary, stock, incentive payments, or retirement plans, as disclosed by the companies in annual reports and/or other regulatory filings with the U.S. Securities and Exchange Commission (SEC). CEOs are listed by total 2012 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

Perks and “all other” compensation: $818,078, all of it consisting of company contribution to savings plans. In its Proxy Statement for 2012, BMS said it “generally does not provide perquisites” to named executive officers, and had not done so last year with one exception, an executive vice president.

Total 2012 compensation: $17,201,980

Top three elements: Stock awards, $9.722 million; Non-equity incentive plan compensation, $3.845 million; Salary, $1.623 million

Robert Bradway

Amgen, president and CEO effective May 23, 20121

Perks and “all other” compensation: $420,059, consisting of $ 288,589 in company credits to supplemental retirement plan; $25,000 in company contributions to supplemental retirement plan; and “Perquisites and Other Compensation” totaling $106,470:

  • $65,009: Personal use of company aircraft
  • $17,805: Personal expenses on business travel
  • $15,000: Personal financial planning services, including tax preparation services
  • $4,256: Personal use of company car and driver
  • $2,564: Expenses related to guests accompanying Bradway on business travel
  • $1,836: Other expenses include gifts, the cost of executive physicals and personal transportation related costs

Total 2012 compensation: $13,570,091

Top three elements: Stock awards, $8.572 million; Non-equity incentive plan compensation, $3.316 million; Salary, $1.262 million

David Brennan

AstraZeneca, CEO and director through June 1, 2012

Perquisites and “other” compensation detailed within “Benefits” of £252,000 ($387,053)2 reported for 2012. The sum includes:

  • Up to £120,000 ($184,363): Allowance for relocation costs
  • £86,000 ($132,133): Cash paid in respect of dividends accrued on Ordinary Shares which vested in 2012, having been deferred in 2009 due to Brennan’s receiving an annual bonus awarded for performance in 2008
  • £17,000 ($26,119): Allowance for professional fees (legal and pensions advice in connection with Brennan’s retirement)
  • £13,000 ($19,975): Car allowance
  • £16,000 ($24,583): “Other benefits including healthcare insurance.”

Total 2012 compensation: £3.232 million ($4.973 million)

Top three elements: AstraZeneca performance share plan, £1,577 million ($2.426 million)3; Pay in lieu of notice, £914,000 ($1.406 million)4; Base salary, £499,000 ($767,758)

Kenneth C. Frazier

Merck & Co., chairman, president, and CEO

Perks and “all other” compensation: $56,374 in 2011 (2012 data unavailable at deadline), consisting of:

  • $35,349: Company car and driver
  • $11,025: Savings Plan company match
  • $10,000: Financial/Tax counseling and tax preparation services
  • $0: Other available perquisites, including company aircraft, personal security and home security monitoring system, relocation expenses, termination-related payments, and executive life insurance

Total 2011 compensation (2012 data unavailable at deadline): $13,347,652, of which $510,000 of $1.5 million base salary was deferred

Top three elements: Stock awards, $3.108 million; Non-equity incentive plan compensation, $3.097 million; Option awards, just under $3 million

Richard A. Gonzalez

AbbVie, chairman and CEO5

Perks and “all other” compensation: $449,288, consisting of:

  • $154,681: Earnings, fees and tax payments for non-qualified defined benefit and non-qualified defined contribution plans
  • $294,607: Non-business related flights

Total 2012 compensation: $7,949,2175

Top three elements: Stock awards, $3.342 million; Non-equity incentive plan compensation, $2.5 million; Salary, $863,942

Alex Gorsky

Johnson & Johnson, chairman/CEO effective April 26, 2012

Perks and “all other” compensation: $159,774, including $48,923 in registrant contributions to defined contribution plans; $6,960 in tax reimbursements6; $5,829 in insurance premiums; and “Perquisites and other personal benefits” totaling $98,062:

  • $51,706: car and driver for commutation and other personal transportation
  • $34,659: personal use of the corporate aircraft
  • Undisclosed: Home security monitoring fees—a portion of the $11,697 difference between reported $98,062 for “perquisite and other personal benefits” and the costs of corporate aircraft and car and driver

Total 2012 compensation: $10,977,109

Top three elements: Non-equity incentive plan compensation, $3.407 million; Stock awards, $2,790,229; Change in pension value and non-qualified deferred compensation earnings, $2.05 million

Joseph Jimenez

Novartis, CEO

Perks and “other benefits”: CHF 128,734 ($138,274), including unspecified “perquisites and other compensation valued at market price.”7

Total 2012 compensation: CHF 13,228,188 ($14,207,321)

Top three elements: Equity plan “select” shares, CHF 4.796 million ($5.151 million); Long-term performance plan, CHF 4.747 million ($5.098 million); Base compensation, CHF 2,025 million ($2.175 million)

John C. Lechleiter, Ph.D.

Eli Lilly & Co., chairman, president, and CEO

Perks and “all other” compensation: $90,000, consisting entirely of company match for each individual’s 401(k) plan contributions. “Perquisites and other personal benefits” totaled zero8

Total 2012 compensation: $14,620,633

Top three elements: Stock awards, $5.625 million; Increase in pension value, $4.424 million; Non-equity incentive plan compensation, $2.982 million

John C. Martin

Gilead Sciences, chairman and CEO

Perks and “all other” compensation: $7,500, which includes matching contributions made by the company on Martin’s behalf to the 401(k) employee savings and retirement plan. “Currently, perquisites and other personal benefits are not a significant component of our executive compensation program,” Gilead stated in its proxy statement, filed March 20 with the SEC.

Total 2012 compensation: $15,257,272

Top three elements: Option awards, $5.433 million; Stock awards, $4.947 million; Non-equity incentive plan Compensation, $3.375 million

Robert L. Parkinson, Jr.

Baxter International, chairman and CEO

Perks and “all other” compensation: $9,012, reflecting in part $7,500 in 401(k) contributions. Company said its “limited range of perquisites” for named executive officers included “limited personal travel on company aircraft,” and an annual physical exam. “In 2012, the aggregate incremental cost associated with providing these perquisites was less than $10,000,” Baxter stated in its Proxy Statement, filed March 22.

Total 2012 compensation: $17,521,770

Top three elements: Stock awards, $6.348 million; Non-equity incentive plan compensation, $4.279 million; Option awards, $3.923 million

Ian Read

Pfizer, chairman and CEO

Perks and “all other” compensation: $409,892, consisting of $224,438 in company matching contributions to its Savings Plan and Supplemental Savings Plan; and “Incremental Cost of Perquisites” totaling $174,204, including:

  • $108,364: Company aircraft usage
  • $48,085: Car usage with driver
  • $10,000: Financial counseling services: Taxable allowance of up to $10,000 per year, which may include tax preparation and estate planning services
  • $7,476: Home security systems: Available to Read and other ELT members. The cost of any such systems is imputed as income to the recipients, as required
  • $279: Personal benefits provided in association with business travel
  • Unspecified: Tickets: Season and other tickets to sporting, cultural and other events for use in connection with its business. On occasion, these tickets are provided to employees, including ELT members, and non-employee directors for personal use. There is no incremental cost associated with such tickets or other items

Total 2012 compensation: $25,634,136

Top three elements: Change in pension value and non-qualified deferred compensation earnings, $7.147 million; Option awards, $6.498 million; Stock awards, $6.442 million

Severin Schwan

Roche, CEO

Perks and “all other” compensation: No separate line, but 2012 Annual Report discloses that total 2012 compensation includes:

  • CHF 30,000 ($32,282): Annual expense allowance
  • CHF 10,335 ($11,121): Payments for tax consulting services, excluding employer contribution to Swiss social security programs AHV/IV/ALV, providing retirement, disability and unemployment benefits

Total 2012 compensation: CHF 12,537,385 ($13,490,851)

Top three elements: Salary, CHF 4 million ($4.304 million); Stock-settled stock appreciation rights, CHF 4 million; non-voting equity securities subject to 10-year blocking period, CHF 2.513 million ($2.704 million)

Kevin W. Sharer

Amgen, CEO through May 23, 2012; chairman through December 31, 2012

Perks and “all other” compensation: $1.357,579, consisting of $726,414 in company credits to supplemental retirement plan; $25,000 in company contributions to supplemental retirement plan; and “Perquisites and Other Compensation” totaling $606,165:

  • $261,712: Personal use of company aircraft
  • $20,346: Personal use of company car and driver
  • $15,040: Expenses related to guests accompanying Sharer on business travel
  • $15,000: Personal financial planning services, including tax preparation services
  • $23,346: Personal expenses on business travel
  • $270,721: Other expenses include gifts, the cost of executive physicals, and personal transportation-related costs

The $270,721 includes the aggregate incremental cost of providing Sharer with the following benefits following his retirement as CEO:

For secretarial, information technology and travel support—approximately:

  • $140,000 for the estimated cost of providing Sharer with a secretary and travel support from January 1, 2013, through December 31, 2017
  • $2,000 for the estimated cost of providing Sharer with information technology support from January 1, 2013, through December 31, 2017
  • $23,000 for the cost of providing Sharer’s secretary with a home office and
  • $92,927 for the cost of providing secretarial, information technology, and travel support during 2012, unrelated to Sharer’s services as an employee during that period

2012 total compensation: $9,128,712

Top three elements: Stock awards, $3.657 million; Non-equity incentive plan compensation, $2.308 million; Salary, $1.806 million

Pascal Soriot

AstraZeneca, CEO effective October 1, 2012

Perks and “other” compensation: No details furnished

Total 2012 compensation: £3.693 million ($5.682 million)2

Top three elements: Award of restricted shares, £2 million ($3.077 million)9; Benefits £1.017 million ($1.565 million)10; Annual bonus for performance during 2012 of 122% of base salary out of a maximum possible award of 180%, £335,000 ($515,410)11

Christopher Viehbacher

Sanofi, CEO

Perks and “other” compensation: Reported in 2012 Annual Report as “Benefits in kind,” €4,051 ($5,310), which “relates principally to a company car.”

Total 2012 compensation: €7,481,151 ($9,806,131)2

Top three elements: Variable compensation, €2.28 million ($2.973 million); Stock options awarded, €2.021 million ($2.649 million); Performance shares awarded, €1.938 million ($2.541 million)

William Weldon

Johnson & Johnson, CEO until April 26, 2012, and chairman until December 28, 2012

Perks and “all other” compensation: $234,688, consisting of $ 59,426 in registrant contributions to defined contribution plans; $5,516 in tax reimbursements6; $1,447 in insurance premiums; and “perquisites and other personal benefits” totaling $168,299:

  • $127,901: Personal use of the corporate aircraft
  • $39,688: Car and driver for commutation and other personal transportation
  • Undisclosed: Home security monitoring fees—a portion of the $710 difference between reported $168,299 for “perquisite and other personal benefits” and the costs of corporate aircraft and car and driver

Total 2012 compensation: $29,838,259

Top three elements: Non-equity incentive plan compensation, $13.448 million; Stock awards, $7.565 million; Option awards, $4.020 million

Miles D. White

Abbott Laboratories, chairman and CEO

Perks and “all other” compensation: $869,713, consisting of

  • $392,759 in earnings, fees and tax payments for non-qualified defined benefit and non-qualified defined contribution plans
  • $213,435: Non-business related flights
  • $168,519: Security costs
  • $95,000: Employer contributions to defined contribution plans
  • Also, White was also eligible as CEO for up to $10,000 of annual costs associated with estate planning advice, tax preparation and general financial planning fees. Benefit not used in 2012

Total 2012 compensation: $25,118,836

Top three elements: Stock awards, $9.429 million; Change in pension value and non-qualified deferred compensation earnings, $6.163 million; Non-equity incentive plan compensation, $4.7 million

Sir Andrew Witty

GlaxoSmithKline, CEO

Perks and “other benefits”: £49,000 ($75,390), “including healthcare, car, personal financial advice, life assurance and matching shares under the ShareReward Plan.12

Total 2012 compensation: £3.892 million ($5.988 million)2

Top three elements: Performance share plan, £1.78 million ($2.739 million); Salary, £1.033 million ($1.589 million); Annual bonus, £905,000 ($1.392 million), of which Witty deferred 50% or £452,000 ($695,423)