Pharma CEO pay vs. performance in 2023 (2024)

By Brian Buntz | May 24, 2024

An analysis of 19 prominent pharma companies, including Johnson & Johnson, Pfizer, Lilly, Roche, Merck & Co. among others, revealed that the average stock return was 3.7% points in 2023. (Lilly was the best performing with a return of 59% while Moderna was the worst in the list with a return of –44%.) By contrast, data from a WSJ analysis of more than 400 CEOs across an array of industries, including pharma, showed an average one-year return of nearly 17%. Most companies in their lineup had a return of at least 13% in 2023.

In the pharma domain, the best performers were David Ricks (Eli Lilly) with a total pay of $26.57 million and a stock return of 61.00% in 2023. Lilly has emerged as the fastest growing pharma in recent memory, thanks in part to a rapidly growing metabolic/obesity segment. Another top performer was Reshma Kewalramani of Vertex Pharmaceuticals whose total annual compensation of $20.59 million. Vertex had a stock return of 40.90% in 2023.

Incidentally, there was no clear connection between pharma CEO salaries and stock performance in 2023. In fact, the correlation coefficient between CEO compensation and stock returns was negative (-0.1345) in a dataset of 14 prominent pharmaceutical CEOs.

On the other hand, there were COVID casualties Albert Bourla (Pfizer) with a total compensation of $21.56 million and a stock return of -41.20% in 2023, and Stéphane Bancel (Moderna) with a total compensation of $17.07 million and a stock return of -44.60% in 2023.

While several pharma CEOs like J&J’s J. Duato ($28M) and Lilly’s David Ricks ($27M) were relatively well-compensated across the CEO universe, their pay packages were dwarfed by CEOs in tech, finance and media. Alphabet’s Sundar Pichai ($281M) topped the list. Other standouts were Broadcom’s Hock Tan ($162M) and Blackstone’s Stephen Schwarzman ($120M). See the interactive graph below the table to explore the pay dynamics in pharma and beyond.

Top paid pharma CEOs in 2023:

• Joaquin Duato (Johnson & Johnson): Total Pay: $28.42 million
• David A. Ricks (Eli Lilly): Total Pay: $26.57 million
• Richard Francis (Teva Pharmaceutical Industries Ltd.): Total Pay: $25.71 million
• Richard A. Gonzalez (AbbVie): Total Pay: $25.66 million
• Robert A. Bradway (Amgen): Total Pay: $22.64 million
• Daniel P. O’Day (Gilead Sciences): Total Pay: $22.61 million
• Albert Bourla (Pfizer): Total Pay: $21.56 million
• Reshma Kewalramani (Vertex Pharmaceuticals): Total Pay: $20.59 million
• Robert M. Davis (Merck): Total Pay: $20.27 million
• Giovanni Caforio (Bristol Myers Squibb): Total Pay: $19.66 million

These pay packages are still far less than what David Epstein, former CEO of cancer specialist Seagen (acquired by Pfizer in 2023) for just a short time in 2022. Epstein, hired in November to help execute Seagen’s $43 billion sale to Pfizer, received a $57.46 pay package according to an SEC filing. This equates to over $1 million per day over his brief tenure. Epstein’s predecessor, Clay Siegall, also collected $32.76 million in 2022 despite leaving the company in May.

Those figures still fall short of the best-paid chief executives in other industries. Outside the pharmaceutical industry, the best performers were Jensen Huang (Nvidia) with a total compensation of $34.17 million and a stock return of 215.10% in 2023, Mark Zuckerberg (Meta Platforms) with a total compensation of $24.40 million and a stock return of 194.10% in 2023, and Dara Khosrowshahi (Uber Technologies) with a total compensation of $24.25 million and a stock return of 149.00% in 2023.

Filed Under: Drug Discovery and Development
Tagged With: CEO pay, executive compensation, industry comparison, outliers, pay vs performance, pharmaceutical industry, stock performance