Sector News

Bristol-Myers chief’s last ‘paycheck’ as CEO is a doozy at $27M

March 19, 2015
Life sciences
Bristol-Myers Squibb CEO Lamberto Andreotti has had a nice run at the drugmaker, paywise. And as he prepares to move upstairs to the chairman’s office–and eventually out the door–he’s going out with a bang.
 
Apparently, a $27 million bang.
 
Apparently, because according to the company’s proxy statement, Andreotti’s 2014 compensation amounts to a bit more than that amount, about $7 million more than his 2013 package. But at least some of that increase depends on a new method of calculating the company’s long-term incentive pay. With that caveat, here are the details.
 
Andreotti’s 2014 base salary was a respectable $1.7 million, slightly more than several of his Big Pharma peers earned. His stock awards–those long-term incentives–amounted to about $18 million. And his cash incentive pay came in at $5.6 million, a cool $2 million more than he’s collected in bonus pay since 2012. Pension increases and other compensation–including use of HeliFlight and NetJets–bring the total to $27,062,382.
 
Bristol-Myers’ compensation committee explained Andreotti’s $22-million-or-so in incentive pay with a few bullet points. Excellent shareholder returns, for one; the proxy says the company’s returns beat “many of our peers” and the S&P 500 Index while Andreotti has been CEO.
 
Enhancing the value of the company’s pipeline was another, and that brings one big prospect to mind: the cancer immunotherapy Opdivo, which won FDA approval in late 2014 and already has a new indication to its credit. Optimism about Opdivo may have helped offset delays with Daklinza (daclatasvir), the hepatitis C treatment that recently lost its breakthrough designation from the FDA because rivals had beat it to the U.S. market. Bristol-Myers once again filed for FDA approval–for Daklinza alongside Gilead Sciences’ ($GILD) Sovaldi–last week.
 
The committee also cited Andreotti’s succession planning as reason for a financial pat on the back. COO Giovanni Caforio will take the reins at Bristol-Myers on May 5, with Andreotti staying on as executive chairman till August. He’ll then step back into a nonexecutive chairman’s role. Also due for reward, the proxy says, was finalizing the sale of Bristol-Myers’ diabetes business to partner AstraZeneca ($AZN) and handling “structural and operating model changes” at the company, which would have to include an R&D rejig that got Bristol-Myers out of discovery work in three disease areas–including hep C and diabetes–and claimed at least 70 staffers. The aim, the company said at the time, was to focus R&D on Bristol-Myers’ most promising fields, including oncology.
 
As for Andreotti’s replacement, the company disclosed earlier this month that Caforio would be in line for an $8.7 million pay package, including a $1.4 million base salary and bonus target at 150% of that figure (with more possible, depending on performance). Stock awards under the long-term incentive plan? Set at $5.235 million, the company said in an SEC filing.
 
By Tracy Staton
 

Related News

February 28, 2021

UCB taps Microsoft to accelerate drug discovery, clinical trials

Life sciences

The deal will see Microsoft use its capabilities in computational services, cloud computing and artificial intelligence to support drug discovery and development at UCB.

February 28, 2021

GSK to close two UK antibiotics manufacturing sites

Life sciences

The planned closures come as GSK has agreed to sell its cephalosporins antibiotics business to Sandoz, a division of Swiss pharma firm Novartis, for as much as US$500m.

February 28, 2021

Colorcon launches TiO2-free supplement coating

Life sciences

“The launch of these new formulations provides the nutritional market with much-needed alternative coating systems that address clean label consumer preferences and are easy to implement,” says Kelly Boyer, vice president film coatings at Colorcon.

Send this to a friend