Sector News

Young startups on new-look Hong Kong exchange see major CEO pay packets

September 2, 2019
Life sciences

We’re all used to seeing Big Pharma CEOs take home the biggest pay packets, but after a relaxing of listing rules in Hong Kong, we’re seeing some very early-stage biotechs handing out some major and even comparable checks to their leaders.

Last year, Ken Frazier, CEO and chair of Big Pharma Merck, a consistent top 10 revenue earner across all pharmas, got a very healthy $20.9 million in total compensation. That’s a huge wage but one you’d expect from a CEO leading one of pharma’s, and indeed the world’s, biggest companies, raking in nearly $43 billion in sales a year.

So, you might expect that the CEO of a much, much smaller startup, which isn’t even making money yet, to make a fraction of that.

Not so: We learned from data compiled by S&P Global Market Intelligence out this week that the total reported compensation of Jiang Ningjun, the CEO of CStone Pharmaceuticals, was a staggering 141.25 million yuan (just under $20 million) last year, putting him on par with Frazier.

But then, CStone has been impressive with its funding drive: Back in 2016, it got off a major $150 million series A round, and last year it was in the top 10 biggest funding rounds for all biotechs, taking in a $260 million series B.

Back in February, the biotech picked up another HK$2.1 billion ($266 million) when it went public on the Hong Kong Stock Exchange, which relaxed its rules for early-stage, prerevenue biotechs in 2018 and has allowed us to see CEOs’ pay packets.

And it’s not just CStone: The paychecks of all the CEOs on the Hong Kong list more than doubled last year, according to its report, with many not too far off from what U.S. pharma CEOs can expect.

Alexander Krasavin, partner and chief commercial officer for human capital solutions for the Asia Pacific and Middle East regions at consultancy Aon, told S&P that this shouldn’t be too much of a shock given that Chinese biotech companies “tend to use remuneration paid to U.S. executives in the sector as a benchmark to decide on what they pay their own executives.”

He added: “CEOs of precommercial biotech companies globally are compensated based on the future value of the company that they are expected to deliver through their leadership.

“Whether or not the executive’s compensation is sustainable is determined by how confident the company’s shareholders and board of directors are of the executive’s ability to deliver that value.”

By Ben Adams

Source: Fierce Biotech

comments closed

Related News

December 5, 2021

Catherine Mazzacco is leaving the position as President and CEO of LEO Pharma

Life sciences

After more than two years of leading LEO Pharma through a major transformation and a change of capital structure in a volatile environment during the global pandemic, the Board of Directors of LEO Pharma and President and CEO Catherine Mazzacco have jointly agreed that she will resign from her current role and leave the company on November 30, 2021.

December 5, 2021

Lonza and Bioqube Ventures to scale biologics and small molecules

Life sciences

Lonza and Bioqube Ventures, a European venture capital firm with a dual investment model including venture creation, have partnered to develop and manufacture biologics and small molecules. This is a five-year services agreement in which Lonza will provide advice and services to Bioqube Ventures’ portfolio companies.

December 5, 2021

UCB and Chiesi enter global license agreement for zampilimab a novel monoclonal antibody for fibrotic lung diseases

Life sciences

UCB has granted to Chiesi global exclusive rights to develop, manufacture and commercialize zampilimab, a monoclonal antibody targeting transglutaminase 2 (TG2), an enzyme associated in fibrotic diseases. UCB will receive upfront payment, future milestone payments and net sales royalties.

Send this to a friend