Soriot, Schleifer, Perreault named top global CEOs — but gone are pharma's golden years
CEOs of giant companies can be remembered for a plethora of things: the deals they strike, the people they hire and fire, the words they utter in interviews, and so on. But for the Street, it’s the financial performance that defines any tenure. The Harvard Business Review has just dropped the 2019 edition of its calculations on that while blending in a dash of the environmental, social and governance factors that have increasingly concerned investors.
Pascal Soriot has earned a place on the list (#77) as he begins his eighth year as AstraZeneca CEO, joining Regeneron’s Len Schleifer, whose ranking fell from 53 last year to 93. AbbVie chief Richard Gonzalez, who shared a spot with Schleifer last year, was among the 35 members of the class of 2018 who didn’t make it this year.
The only other biopharma representative is Paul Perreault, CEO of the oft-overlooked but hefty Australian player CSL. But other health care leaders, including medtech conglomerate Boston Scientific’s Michael Mahoney and instruments manufacturer Thermo Fisher chief Marc Casper made an appearance, as did Bernard Charlés of Dassault Systémes, the French software maker that recently got into the clinical trial business via a $5.8 billion acquisition of Medidata.
Harvard Business Review, which has published eight versions of the rankings in the past years, sorts the CEOs by overall shareholder return and increase in market capitalization over their entire tenure — metrics that account for 70% of the final score. But they also give some weight to ESG, which measures the sustainability and ethical impact of a company, “to reflect the fact that a rapidly growing number of funds and individuals now focus on far more than bottom-line metrics when they make investment decisions.”
Among a group who have been in the job for 15 years on average, Soriot is also in the minority as a non-insider. Since jumping to AstraZeneca, the former Roche exec has executed a turnaround centered on three big cancer franchises — Lynparza, Tagrisso and Imfinzi — which also featured an organizational overhaul and aggressive divestitures.
Soriot’s ascension to the top 100 CEOs on the S&P Global 1200 follows a declaration of victory late last year when he proclaimed “the start of a period of sustained growth for years to come.”
That’s clearly still an ongoing process, as his financial rank on HBR’s list is just 202. But strong numbers on the ESG side put him above Schleifer, who ranked 19 financially but had much poorer ESG grades.
Schleifer, who’s often lauded for building the company from scratch together with R&D chief George Yancopoulos (and compensate themselves amply for that), has been on the list for the past three years. In addition to a reputation for world-class antibodies, Schleifer is also known for being vocal on broader corporate issues such as drug price hikes and American public infrastructure.
In comparison, Perreault keeps a much lower profile, even though he leads a company that has a solid #16 standing among the pharma companies with the highest market caps around the world.
What’s also clear from this year’s compilation is that pharma, suffering from a broken public image and dwindling returns on investment, is lingering in a dark valley. It was only five years ago that John Martin of Gilead, David Pyott of Allergan, Lars Sørensen of Novo Nordisk, and Michael Pearson of Valeant occupied the top 10 positions on the ranking. All four have since stepped down and, following a spectacular and scandalous fall from grace involving fraud and price gouging, Valeant has rebranded as Bausch and Lomb.