EXECUTIVE COMPENSATION: Pharmaceutical CEOs Top Charts
Consistent with the much-remarked upon phenomenon of health care executives' compensation packages outstripping those of their peers despite growing shareholder concern, documents filed this week with the Securities and Exchange Commission show that four pharmaceutical executives earned blockbuster incomes last year after exercising some of their stock options. Amgen Inc. CEO Gordon Binder tapped $37.4 million in stock options and took home a salary and bonus of $1.7 million. Charles Heimbold Jr., CEO of Bristol-Myers Squibb, exercised $30.4 million in options, received a $1.9 million bonus and earned a $1.2 million salary. Before retiring, Eli Lilly & Co. CEO Randall Tobias tapped $32 million in options and took home $4.4 million in salary and bonus. If their companies continue to perform well, the executives could take home record paychecks in the future; each has access to a treasure trove of unexercised stock options -- valued at $104 million for Binder, $204 million for Heimbold and $115.2 million for Tobias (White, AP/Nando Times, 3/7). The Baltimore Sun reports today that Warner-Lambert CEO Melvin Goodes earned $22 million in 1998 as rising sales of the cholesterol pill Lipitor "made the company one of the world's most profitable drugmakers." The paycheck marks a 40% raise over the $15.7 Goodes made in 1997 (3/9).
66% Higher than Peers
A survey by the Executive Compensation Advisory Services found that the average health care CEO's income rose $4.9 million in FY 1997, "the second highest average gain of any industry." Analyst Graef Crystal, publisher of the Crystal Report, found that pay packages for health care executives are on average 66% higher than their peers across 31 industries. "It's interesting when we're having this national problem with medical care costs, that CEOs have got their snouts so deeply imbedded in the trough," Crystal said (AP/Nando Times, 3/6).