AbbVie CEO Gonzalez Receives 11% Pay Raise to $24M in 2020 Amid Strong Performance of Immunology Drugs Skyrizi and Rinvoq

Compiled by River

A major challenge facing AbbVie CEO Gonzalez during his tenure has been whether he could steer the Illinois-based pharmaceutical company safely through the patent cliff crisis of Humira, its revenue cornerstone. Judging by the results in 2020, he is on the right track, as reflected in his compensation.

Recently, AbbVie disclosed in a proxy statement that in 2020, the company would pay its long-serving CEO, Gonzalez, a total compensation of $24 million, higher than the $21.6 million in 2019. The 11% increase was mainly due to a $3.3 million rise in his long-term equity awards, with some COVID-19-related operational adjustments also playing a role. His equity-based compensation amounted to $14 million, and he received nearly $5 million in cash bonuses.

AbbVie officially completed its $63 billion acquisition of Allergan in May. As a result, the company’s 2020 revenue increased by 37.7% to $45.8 billion. On a constant-currency basis, the company’s revenue met the target set by its Board of Directors.

Despite the setbacks caused by the COVID-19 pandemic, AbbVie successfully achieved this goal, thanks to the launch of two new immunology drugs: Skyrizi and Rinvoq. The sales performance of these two drugs last year amazed industry observers. Their revenue in 2020 was $2.3 billion, and this figure is expected to double this year.

AbbVie has staked its long-term growth on these two drugs, particularly in light of the potential biosimilar crisis facing Humira in 2023. These two immunological agents possess significant market potential, with Rinvoq already making an impact this year in the treatment of psoriatic arthritis, ankylosing spondylitis, and atopic dermatitis. Buoyed by recent clinical trial successes, AbbVie has substantially raised its sales forecasts for these two drugs, increasing the projection from the previous $10 billion to $15 billion by 2025.

Investors were pleased with the recent developments, as AbbVie ranked among the top companies in market capitalization growth within the biopharmaceutical industry. From year-end 2019 to 2020, its shares surged by 44.4%, including a 22.4% increase in the fourth quarter, driven largely by positive news surrounding these two drugs.

They helped Gonzalez secure a $4.9 million cash incentive, equivalent to 175% of the target, which itself was set at 165% of his base salary. However, the primary increase in Gonzalez’s compensation came from his long-term equity awards, totaling $1.4 million. In 2020, AbbVie delivered strong performance in metrics such as earnings per share and return on invested capital, resulting in a substantial bonus for Gonzalez.

The Committee also highlighted some of AbbVie’s achievements in responding to the COVID-19 pandemic. For instance, the company did not lay off employees or reduce salaries due to the pandemic. The company also appointed two senior executives: Gonzalez relieved Jeffrey Steward, AbbVie Inc.’s U.S. Commercial Operations Head, of his duties and succeeded Carlos Alban, who is retiring, as the new Chief Commercial Officer of AbbVie Inc. He also appointed a new Chief Equity Officer as part of the company’s efforts to foster an inclusive work environment.

Reference Source: AbbVie CEO Gonzalez scores $24M in 2020 pay—up 11%—as Rinvoq, Skyrizi take center stage