Stock and option awards boosted pay packages of the top 10 highest-paid pharmaceutical CEOs in 2018, with half of them receiving an increase in total adjusted compensation, according to data compiled by S&P Global Market Intelligence.
Kenneth Frazier, who serves as chairman, president and CEO of Merck & Co. Inc. — the Kenilworth, N.J.-based maker of blockbuster cancer drug Keytruda — claimed the top spot among the highest-paid executives, with $20.9 million total adjusted compensation, up 22.1% from $17.1 million in 2017. His pay included $9.5 million in stock and $3.9 million in options.
Following Frazier is Alex Gorsky, who leads Johnson & Johnson, the largest U.S. healthcare company which offers products ranging from cancer drugs to medical devices and baby powder. For 2018 Gorsky took home $20.1 million in total compensation, a 12% decrease compared to the prior year.
J&J's board awarded Gorsky an annual performance bonus of $3 million and long-term incentive awards totaling $13.5 million after the company achieved combined financial and strategic goals.
The New Brunswick, N.J.-based company also had the highest CEO-to-median employee salary ratio of 268-to-1, the data shows. According to J&J's proxy statement, the median employee's annual total compensation in 2018 was $75,000.
Meanwhile, Pfizer Inc.'s Ian Read earned $19.5 million in his last year as CEO of the second-biggest U.S. healthcare company. He was awarded $7 million in stock, along with options worth $6.9 million.
Read, the highest-paid pharmaceutical CEO in 2017, stepped down from the role in December 2018. He was succeeded by Albert Bourla in January.
Bristol-Myers Squibb Co.'s Giovanni Caforio earned $19.4 million total compensation, reflecting a 3.7% pay increase from the previous year. Caforio also received the biggest stock and options awards among the top 10 highest-paid CEOs, amounting to $13 million and $4.1 million, respectively.
Nektar Therapeutics CEO Howard Robin saw the biggest drop in total adjusted compensation in 2018.
After ranking as the fourth highest-paid CEO in 2017, Robin's pay fell 26.3% to $13.3 million from $18.1 million in 2018, translating to the lowest CEO-to-median employee pay ratio of 82. Excluding the CEO, the median employee's annual total compensation in 2018 was $162,978, according to Nektar's proxy statement.
The San Francisco-based drugmaker awarded $5 million in stock and $5.6 million in options to Robin.
Acreage Holdings Inc.'s Kevin Murphy, the ninth highest-paid CEO in 2018, had the highest year-over-year raise in stock and option awards. Murphy earned $10.4 million in total compensation, including $10.1 million in stock and options.
In June, the New York-based cannabis asset manager was acquired by Canada's Canopy Growth Corp. in a deal valued at $3.4 billion.
MyoKardia Inc. CEO Tassos Anastasios Gianakakos saw the biggest pay hike in the highest-paid list. Gianakakos' compensation was up 179.6% year over year at $9 million, including $8 million in stock and option awards.
The South San Francisco, Calif.-based biopharmaceutical company is advancing its lead drug candidate mavacamten as a potential treatment of hypertrophic cardiomyopathy, or HCM, a progressive disease with no existing treatments for the underlying cause. HCM could lead to heart failure, sudden death and stroke.
In January 2019, the company said its partner, French drugmaker Sanofi, decided not to extend a research collaboration that sunset on Dec. 31, 2018. In July, MyoKardia said it is buying back royalty rights on the sale of mavacamten and another experimental medicine, MYK-224, from Sanofi for a total of $80 million.
