Executive Compensation in Pharma: BeiGene CEO John V. Oyler Earns RMB 188 Million, Ranking Second Globally

Pharmaceutical Network, April 29 — CEO compensation at listed pharmaceutical companies revealed: John Oyler of BeOne Medicines ranked second with RMB 188 million; additionally, media reports disclosed Wu Xiaobin’s income at approximately RMB 145 million.

 

 

April 28, United StatesRenowned PhysicianPharma media outlet Endpoints News releases the “2018 Big Pharma CEO Compensation” ranking.

 

 

The list ranks the compensation of CEOs from 20 major publicly listed pharmaceutical companies.

 

Among them, Teva’s CEO Kare Schultz topped the list with $32.5 million (RMB 218 million); BeOne Medicines’ John Oyler ranked second with $27.9 million (RMB 188 million). According to the table, this represents a 170% year-on-year increase from his $10.3 million compensation last year, marking the second-fastest salary growth among the 20 CEOs on the list.

 

Furthermore, Nick Leschly, CEO of bluebird bio Inc., saw the largest year-on-year increase in his annual salary, which rose by 176%, ranking him fourth with a compensation package of $24 million (RMB 161 million).

 

 

Meanwhile, the list shows that established large pharmaceuticalEnterpriseThe CEO compensation at companies such as AbbVie, Johnson & Johnson, Pfizer, and Sanofi has declined to varying degrees; for example, the compensation of Johnson & Johnson’s CEO, Alex Gorsky, decreased by 33% year-over-year.

 

Consistent with the 2017 situation, GSK CEO Emma Walmsley’s salary remained the lowest in 2018.

 

 

According to a report by Securities Times China, in 2018, BeOne Medicines reported revenue of $198 million and a net loss of $674 million. The compensation paid to its Chairman and Chief Executive Officer, John Oyler, amounted to $27.8958 million (approximately RMB 188 million), while the compensation paid to its President, Xiaobin Wu, was $21.549 million (approximately RMB 145 million).

 

According to the annual report previously released by BeOne Medicines, as of December 31, 2018, the Group’s total compensation costs amounted to US$262.7 million (equivalent to RMB 1.77 billion).

 

Thus, the compensation of Ou Leiqiang and Wu Xiaobin accounts for only 18.8% of the total compensation costs, which further confirms that BeOne Medicines maintains a relatively high overall compensation expenditure, demonstrating its willingness to invest in its employees.

 

Furthermore, BeOne Medicines’ annual report showed that R&D expenses for the year ended December 31, 2018 amounted to US$679 million (approximately RMB4.569 billion). The increase in R&D expenses was primarily attributable to ongoing and newly initiated late-stage pivotal clinical studies.

 

 

High executive compensation and a high proportion of R&D expenditure appear to be common characteristics of many biotechnology companies.

 

However, it should be noted that data indicates the salaries of Ou Leiqiang and Wu Xiaobin are not purely annual base salaries. Ou Leiqiang’s base salary is $650,000, and Wu Xiaobin’s base salary is $380,900. Their income primarily derives from stock awards and option awards, which are conditional long-term compensations subject to vesting in installments over a five-year service period.

 

But there is no doubt that many biotechnology companies aim to attract top-tier talent like Wu Xiaobin by offering high salaries.

 

Public records indicate that Wu Xiaobin was the first Chinese national to serve as the head of a multinational pharmaceutical company’s China operations. He previously held CEO positions at Wyeth Pharmaceuticals and Pfizer China, with industry commentators once hailing him as the most successful Chinese executive to lead a multinational pharmaceutical corporation.

 

Previously, Wu Chun, Partner and Managing Director at Boston Consulting Group, shared in public that over the past five years, China has seen rapid growth in the number of new drug applications for Class I drugs, newly approved clinical trials, and innovative drugs launched on the market. However, current research and development efforts are still primarily focused on fast-follow approaches, with relatively limited breakthrough innovation.

 

Therefore, to keep pace with global innovation, China’s biopharmaceutical companies focused on innovative drugs need to recruit top-tier international talent, which requires offering competitive, world-class compensation packages.

 

Another biopharmaceutical company, Ascletis Pharma, has taken similar actions.

 

On March 1, Ascletis announced the appointment of Dr. Li Zhengqing as Chief Medical Officer and President of Research and Development for Greater China, reporting to Dr. Wu Jinzi, Founder, Chairman, and Chief Executive Officer of Ascletis.

 

It is understood that Li Zhengqing has served as Global Vice President and General Manager of the China R&D Center at Merck & Co. since 2011. Under his leadership, more than 20 Merck products have been successfully approved in China. From 2017 to 2018 alone, over 10 products received approval in China, including Keytruda, Zepatier, Isentress, HPV vaccines (Gardasil and Gardasil 9), RotaTeq, Bridion, NuvaRing, and Noxafil.

 

For biotechnology companies such as Ascletis and BeOne Medicines, high-quality candidates in their research pipelines are indeed the prerequisite for vast market potential and clear commercial prospects, and also the focus of capital attention; therefore, they offer high salaries to recruit top-tierPharmaceuticalsTalent, as expected.

 

According to Fierce Pharma, recent salary surveys indicate that the compensation for medical representatives at biotechnology companies has gradually surpassed that of sales personnel at large pharmaceutical companies, a trend seemingly mirrored among CEOs as well.