Regeneron has long set the pace for setting aside the richest annual pay packages in the biotech industry for its outspoken CEO Len Schleifer and R&D chief George Yancopoulos. And in 2016 they brought home a mother lode of wealth — which still fell far short of what they made in the previous two years.
On Tuesday the biotech $REGN filed their proxy statement with the SEC, and the outspoken Schleifer came out with a full compensation award of $28.3 million built on an annual salary of $1.25 million. His CSO Yancopoulos earned compensation totaling a very close $27.8 million.
The pay packets followed a year that was marked by a struggle to dominate a market for PCSK9 drugs, with some big wins in court as the actual revenue remained meager. In the meantime they were dealt a setback on sarilumab, when regulators at the FDA found problems with their manufacturing partners at Sanofi. But Regeneron and Sanofi also recently scored an approval for Dupixent, widely tapped as a potential megablockbuster in the making.
For whatever reason, though, the two had their pay slashed from the extraordinary levels posted in 2015 and 2014. Schleifer earned $47.6 million in compensation in 2015, with $42 million the year before. For Yancopoulos it was $40 million and $35.5 million.
The rest of the team saw similar rewards, and cuts. Neil Stahl, EVP of research, grabbed a package worth $11 million, also a top-level reward for the industry. But it was down from $18.3 million in ’15. CFO Robert Landry bagged $5.1 million, down from $8.2 million.
Companies often like to say that they’re careful to see how their executives’ compensation compare to their peers in the industry, but while Schleifer can more than hold his own with the best paid Big Pharma execs — Ken Frazier at Merck earned compensation totaling $21.8 million last year — Yancopoulos is way ahead of anyone he could consider a peer.
In the most recent roundup of CSO salaries, which I’ll be exploring more later in the week, only J&J’s Paul Stoffels, at $12.7 million for 2016, comes close. Most Big Pharma R&D chiefs earn compensation of around $6 million to $8 million a year.
But Yancopoulos has long been setting a standard of one. In 2012 his compensation rang up at $81.3 million.
Schleifer, though, has always unapologetically maintained that he had to pay Yancopoulos more than the industry average, to keep him at Regeneron, where the two have been credited with a big run of new drug approvals after they started the company together in 1989.
“George is the most talented guy in the industry,” Schleifer told FierceBiotech a few years ago. “I wanted to make sure that he had absolutely no reason to go someplace else or go out on his own, because we can pay him hundreds of millions of dollars or we can buy his drugs for billions of dollars when he’s at another company. So it’s a lot cheaper this way.”
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