Some Biotech Execs Get Huge Pay Boosts as VC Money Pours In
Published: Sep 02, 2015
September 1, 2015
By Alex Keown, BioSpace.com Breaking News Staff
SEATTLE – Investments from venture capitalists into the biotech industry has led to a boost in executive pay, Pitchbook reported Friday.
Over the past two years, there has been an infusion of more than $10.6 billion in venture capital into 549 U.S. biotech companies, Pitchbook, which tracks venture capital funding, reported.
“The activity and success seen in the venture-backed biotech space has trickled down to the compensation of the executive teams and scientists running these companies. While increases in tech company wages have been well publicized, the increases in biotech are equally interesting and important for any company looking to attract and retain talent (as well as investors active in the industry),” Pitchbook said.
Pitchbook broke down salary information for four top company positions, chief executive officer, chief financial officer and chief business officer. According to their research, the average salaries for companies that received $50 to $70 million in venture capital are:
•CEO -- $436,783
•CFO -- $280,400
•CMO -- $$367,750
•CBO -- $274,275
Venture capital is important for many biotech companies to fund research and development of drugs and therapeutics. In May, Seattle-based Adaptive Biotechnologies nabbed $195 million in venture capital. That funding, which was led by Matrix Capital Management, came after a spate of funding rounds that provided more than $400 million to the company.
Some of those funds will certainly boost compensation packages. In February, Seattle-based Juno Therapeutics made some aggressive moves by rewarding its executives with generous bonuses for exceeding corporate goals and expanding its talent pool with new hires. The company, which was founded about a year-and-a-half ago, awarded CEO Hans Bishop and Steve Harr, the chief financial officer, with hefty bonuses for exceeding corporate goals. Bishop was awarded a $450,000 bonus, more than double his salary of $425,000, and Harr received a $200,000 bonus.
In June, analysts highlighted the compensation packages of several pharmaceutical executives. Below are five packages highlighted by BioSpace earlier this year.
• Hans Bishop, Juno Therapeutics (JUNO). According to Bloomberg, Bishop took home $88.2 million in total compensation in 2014, which made him the 11th highest paid CEO in the United States.
• Arie Belldegrun, the CEO of Kite Pharma, Inc. , was given awards valued at $95.2 million as of the company’s fiscal year-end in 2014, ranking him No. 8 on the index.
• Radius Health ’s Robert Ward took home $33.5 million in total compensation for his first year helming that company.
• Anacor Pharmaceuticals, Inc. CEO Paul Berns took home $22.4 million.
• Durata Therapeutics, Inc. CEO Paul Edick’s had compensation valued at $19.8 million.
The labor organization AFL-CIO compiled a list of top executive pay for 2014 and unsurprisingly, many of the top executives from the pharmaceutical industry made that list. Some notables are listed below:
• Regeneron Pharmaceuticals, Inc. ’s top executive Leonard S. Schleifer took home $41,965,424 in total compensation for 2014.
• Jeffrey M. Leiden of Vertex Pharmaceuticals was awarded $41,965,424 in total compensation in 2014. Since Leiden assumed the reins of the cystic fibrosis-drugmaking company three years ago, the company’s shares have gained 226 percent, while the Nasdaq Biotechnology Index rose 207 percent.
• Bristol-Myers Squibb Company ’s CEO Lamberto Andreotti took home $27,062,382 in 2014.
• Kenneth C. Frazier, CEO at Merck & Co. , had $25,029,370 in total compensation.
• Robert J. Hugin of Celgene Corporation earned $24,236,113 in 2014.
• Pfizer Inc. ’s Ian Read took home $23,283,048 in total compensation last year.
• Richard Gonzales of AbbVie was awarded $22,006,271 in total compensation.
• Leonard Bell of Alexion Pharmaceuticals Inc. received $20,570,703 in total compensation.