The COVID-19 pandemic has proved to be a massive boon for many biotech companies, resulting in large profits and handsome pay increases for their chief executives. With their success, these companies have shown just how powerful the biotech industry has become.
Moderna is one of the few companies to have made billions off of a single product. Their revolutionary Spikevax vaccine has been a major success, propelling the biotech to towering heights within the highly lucrative pharmaceutical sector. Joining the likes of GSK and AbbVie, Moderna has become an unstoppable force in the industry, earning mean profit margins that far exceed those of other sectors.
Under Stephane Bancel’s leadership, Moderna has become the corporate force behind the second most widely distributed coronavirus vaccine. His remarkable success was rewarded in 2022 when Bancel earned a staggering $19.4 million in total compensation, of which only $1.4 million was his base salary – the rest came from bonuses and stock awards.
Albert Bourla, CEO of Pfizer, received a substantial increase in total compensation despite a 4% decrease in non-equity-based incentives between 2021 and 2022. His base salary rose by 2.9%, while he was also awarded $7.65 million in incentive awards. According to Pfizer’s Q4 2022 proxy statement, Bourla’s total compensation rose by a whopping 36%, making him one of the highest-paid executives in the industry.
Emma Walmsley, CEO of GSK, has had a turbulent year of highs and lows, yet has still managed to secure a 3% raise in her total compensation package, which now stands at an impressive $10.17 million. Among her successes, GSK has seen a surge in the sales of their Shingrix vaccine despite a looming threat of potential Zantac lawsuits.
Walmsley’s salary of 1.26 million pounds was bolstered by a generous bonus of 250% of her salary, though much of it has been deferred, according to the company’s annual report.
Rick Gonzalez, at AbbVie, saw his total compensation increase by 10% from 2021 to 2022, bringing his total earnings to an impressive $26.3 million.
As cost of living continues to skyrocket, companies are feeling the financial pressure to keep up with competitive pay packages for their top executives. This has led to a noticeable increase in CEO pay in recent years, as organizations strive to attract and retain the best talent in the industry.
The U.S. government is failing to keep up with the reality of biotech profits, missing out on both the opportunity to control costs and the chance to comprehend the intricate inner workings of the industry. Without delving into the complexities of internal pay systems, regulations are not having the desired effect of curbing biotech profits.
In response to the emergency presented by the pandemic, the government provided publicly funded research to companies with no strings attached. Unfortunately, this has left pharmaceutical companies to take the initiative when it comes to creating incentives for equitable and effective distribution, such as patient access programs. Nevertheless, the government’s efforts have been pivotal in helping companies to continue their research and development.
The current market model has made CEO leadership a balancing act between risk and reward, with investment dollars being the barometer of success. In the highly risky business of researching, developing and marketing pharmaceutical products, CEO compensation reflects the need for a higher reward for the risk taken. As such, the trajectory of CEO pay is unlikely to change any time soon.