Sanofi CEO Paul Hudson's Compensation Declines for Third Consecutive Year to €10.57 Million in 2023

Feb 27, 2024 12:03 CST Updated 12:03

Sanofi

Pharmaceutical R&D Developer

According to Fierce Pharma, based on Sanofi's annual report,In 2023, the company's Chief Executive Officer, Paul Hudson, will receive a total compensation of 10.57 million euros (11.44 million US dollars).. Notably, this is itsSlight decrease in compensation for the third consecutive year.

HudsonSalaryFor three consecutive yearsDecrease

In September 2019, Paul Hudson left Novartis to join Sanofi as CEO.In 2020, Hudson's total compensation was€11.34 million ($12.93 million)；In 2021, his/her total compensation was€10.98 million ($12.98 million)；In 2022, HudsonThe total compensation is€10.72 million ($11.27 million), although if converted into US dollars based on the annual average exchange rate, its compensation for 2023 has increased.

CEOs of major European pharmaceutical companies typically do not receive the same level of compensation as their American counterparts. For exampleIn 2022, among the list of the 15 highest-paid CEOs in the industry, 14 were from American companies.Among them, AstraZeneca's Pascal Soriot ranked 15th on the list with an income of $19 million.

Chart 1: Top 15 pharmaceutical company executive compensations with a market value of at least 20 billion USD in 2022 (Source: Fierce Pharma)

However,The ranking of executive compensation in the industry has changed in the new year.It was reported that AstraZeneca's Soriot received a compensation of £16.9 million ($21.3 million) in 2023, while Novartis CEO Vas Narasimhan received CHF 13.3 million ($15.3 million), marking a 21% increase in his compensation compared to 2022.

As for 56-year-oldHudson, different from 2022,In 2023, there is no bonus portion in the salary structure.. Whereas in 2022, his bonus was 2.01 million euros — this was also one of the reasons he joined the company in 2019, three years after he served as the head of Novartis' pharmaceutical division.

Hudson's compensation composition in 2023 includes:

A fixed salary of 1.4 million euros, which is the same as his figure from the previous year;
€2.38 million in variable pay, up from the previous year€2.34 million；
Performance Stock Valuation ApproximatelyFor €6.78 millionThe equity compensation, these shares are from the company's board of directorsIn May last yearGrant.

Among them,The variable compensation portion isSanofi according to HudsonTo calculate the company's achievement of five targets, including sales growth, net income, cash flow, and operating profit margin.According to reports, Sanofi has exceeded expectations for each of its targets. In the report, Sanofi stated that the company's most successful target was the growth of its key assets and mentionedThe Sales Boom of Anti-inflammatory Drug Dupixent and Vaccine Performance.

In fact, in the CEO's compensation package of the world's top pharmaceutical companies, the fixed salary is generallyA very small portion of their compensation is fixed salary, while the majority is distributed in the form of bonuses or stock options. For instance, Joaquin Duato, CEO of Johnson & Johnson, received a total compensation of $19.87 million in 2022, of which $15.99 million was long-term equity incentives, accounting for as high as 80%.

In addition, the determination of the CEO's compensation at Sanofi is...Referred toThe industry's 12 similarly sized companiesThe compensation data for its CEO is set, including Amgen, AstraZeneca, Novartis, GlaxoSmithKline, Bayer, Pfizer, and Roche.

"In this peer group,Paul Hudson's total compensation is in the lower range of the second quartile of the compensation paid by this group of companies.." Sanofi explained in its 40-F form report. "We also took into account the practices of the top 40 (market value) companies."

Paul HudsonFive-Year Strategy

Paul Hudson inJoin Sanofi as the incoming CEONot long after,Then proposed "Developing first-in-class drugs, top-tier drugs, and vaccines" Vision ", then proposed2020-2025 Five-Year Strategy —— Play to Win(Go for Growth), including four major modules: Focus on Growth, Lead Innovation, Improve Efficiency, and Reshape the Way of Working.

Chart 2: Sanofi's Play to Win Strategy (Source: Sanofi)

In 2020, Sanofi launched the "Play to Win" five-year plan, shifting its focus toOncology, Rare Diseases Business, andEstablish Three Core Global Divisions: Specialty Drugs, General Drugs, and Vaccines。

In 2023, while releasing its third-quarter financial report, Sanofi announced an update to its "Play to Win" strategy, gaining industry attention for its plan to spin off its consumer healthcare business. In fact, after Paul Hudson took office in 2019, Sanofi first proposed the plan to spin off its consumer healthcare business to focus resources on the development of innovative drugs and vaccines. Following the proposal, Sanofi took some actions, such as selling multiple consumer healthcare products and spinning off its consumer healthcare business in India.

Recently,The Four-Year Business Divestiture Plan Seems to Be Approaching Its Grand Finale——SanofiPlans to separate the consumer healthcare business by creating a publicly listed company headquartered in France as early as the fourth quarter of 2024.。The spin-off planAttracted interest from several private equity firms, including private equity giants such as Advent International and Blackstone, with an acquisition valuation potentially reaching $20 billion.

References:

[1]Sanofi CEO Hudson takes another small dip in pay to €10.57M.Fierce Pharma.By Kevin Dunleavy.Feb 26, 2024 11:34am.

[2]Coming and going paid off for biopharma CEOs in 2022.Fierce Pharma.By Kevin Dunleavy.Jun 27, 2023 8:35am.

[3] Finalized! Sanofi China Organizational Structure Update, Global Management Major Changes. MedTalent Medical Talent. 2023-09-01.

[4] Valued at $20 billion, is Sanofi's divestment of its consumer healthcare business imminent? Multiple private equities reportedly interested in acquisition. Pharmaceutical Economy News. 2024-02-23.

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