The top 50 biotechs by mar­ket cap — and what their CEOs’ com­pen­sa­tion deals tell us about bio­phar­ma

This is a very good time to be run­ning a pub­lic biotech com­pa­ny.

Af­ter a string of good years for in­dus­try IPOs, we’ve seen a large wave of up­starts make the leap to the pub­lic mar­kets. And the pay­off in the an­nu­al sweep­stakes of CEO com­pen­sa­tion deals has been noth­ing less than ex­tra­or­di­nary.

I’ve been mean­ing to dig past the list of the largest glob­al bio­phar­ma com­pa­nies I re­port on each year, and re­search­ing the most re­cent round of CEO pay pack­ages this year in­spired me to go all out on the top 50 around the world, us­ing their mar­ket caps to rank the pub­lic com­pa­nies.

Some of the biggest lessons on com­pen­sa­tion in­clude:

Val­u­a­tion size mat­ters. But it doesn’t nec­es­sar­i­ly dic­tate. The CEOs of the top 10 bio­phar­ma com­pa­nies earned small­er com­pen­sa­tion pack­ages on av­er­age than the same group for biotech. But the ma­jor leagues are more con­sis­tent. The top 10 biotech CEOs on the list grabbed deals that were up over­all by 59% over what they got for 2017, and they won’t all stay in the top 10 when we crunch the num­bers for 2019.

Among the gi­ants, the av­er­age hike was 9%. None of it, of course, is ground­ed by in­fla­tion­ary grav­i­ty. Ian Read got his big pack­age in 2017 as the com­pa­ny in­sist­ed they need­ed to spike his pay to con­vince the long­time Pfiz­er vet to stay on. You could al­so call it a sweet­heart re­tire­ment deal for the chief of one of the biggest phar­ma com­pa­nies on the plan­et.

Mark Alles got paid well for his last year at Cel­gene, and Gio­van­ni Caforio can now be re­spon­si­ble for the pow­er and the glo­ry and the set­backs. And:

It’s still very much a man’s world in the top tier. There are 2 women on this top 50 list, Mar­tine Roth­blatt at Unit­ed and He­len Tor­ley, who helms Halozyme. And at least half of the biotech CEOs nabbed com­pen­sa­tion deals with more — of­ten far more — than what GSK CEO Em­ma Walm­s­ley re­ceived for 2018.

For those stay­ing on in their jobs, and there are no guar­an­tees, it will take a few years to vest their stock op­tions, pro­vid­ed they don’t get bought out. Then it all ac­cel­er­ates. If the stock goes up, the re­wards can be spec­tac­u­lar. Fail­ure is pun­ished with un­der­wa­ter op­tions, which can al­so spur up new share pack­ages to take their place.

There are, cer­tain­ly, many pri­vate com­pa­nies that would fit in­to this list based on val­u­a­tions, but they don’t re­port their num­bers. Re­port­ing re­quire­ments make it easy to grab com­pen­sa­tion num­bers on US biotechs, though some of the for­eign is­suers slipped through on the com­pen­sa­tion side.

If any of you can fig­ure those out, drop me a line. In the mean­time, I’ve dropped them a line.

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