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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