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Barry Cohen
Barry Cohen
Articles (31) 

Regeneron CEO Has Rewarded Shareholders Handsomely

Some of the highest compensated company CEOs in the industry have done well for their investors, others not so much

Regeneron Pharmaceuticals Inc. (NASDAQ:REGN) shareholders ought to take time to toast the company’s president and CEO, Leonard Schleifer. In the time he’s been at the helm of the Tarrytown, New York-based biotech, the company’s share price is up about 3,300% to $417. Schleifer earned $26.5 million in 2017, according to an article in Genetic Engineering & Biotechnology News. So if you divide the percentage increase in company shares since he’s been CEO by every million earned, the multiple is nearly 124, far and away the best among his peers.

Now while this is a somewhat arbitrary way of evaluating the performance of the top 10 highest-paid biopharma CEOs in 2017, it does provide some basis for comparison. After all, don’t horseplayers make their bets based on a horse’s track record? And aren’t the San Diego Padres paying Manny Machado $300 million because they think he can duplicate his past success?

Another stellar performer has been Martine Rothblatt, chairman and CEO of United Therapeutics Corp. (NASDAQ:UTHR). Given the performance of the company’s shares since she’s been at the helm, investors are getting a good deal. Rothblatt founded the company in 1987. Since it went public in 1999, shares are up about 1,300% to $117. Rothblatt earned more than $37 million in 2017, a multiple of 32.

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If Schleifer and Rothblatt sell at a premium, on the other end of the spectrum are Brent Saunders of Allergan Inc. (NYSE:AGN) and Giovanni Caforio of Bristol-Myers Squibb Co. (NYSE:BMY). Both have negative multiples. Saunders appears to have been grossly overpaid at nearly $33 million. Since he became CEO in 2014, Allergan shares have plummeted by more than 25%. Caforio, meanwhile, has overseen a decline of about 20% in Bristol-Myers shares during his watch. Perhaps that’s because he feels underappreciated, having earned a measly $18.7 million in 2017, good for only ninth on the list.

Just behind Rothblatt in rewarding the investing faithful is Marc Casper, CEO of Thermo Fisher Scientific Inc. (NYSE:TMO). In the 10 years he has led the company, the share price has jumped from $35 to more than $250. That more than 600% gain gives him a multiple of 27 based on his 2017 compensation of $22.3 million.

The highest-paid CEO, Douglas Ingram of Sarepta Therapeutics Inc. (NASDAQ:SRPT), took home a sweet $57 million during 2017, his first year on the job. Since then, Sarepta shares have gained about 320%, giving Ingram an acceptable multiple of about 5.6. We will have to see how well he does going forward. After all, to quote the Bible, “‘to whom much is given, much will be required.”

Among the others on the best-paid list, AbbVie Inc. (NYSE:ABBV) CEO Richard Gonzalez scored a 4.3 multiple and Alex Gorsky of Johnson & Johnson (NYSE:JNJ) a 3.3. More pedestrian returns were chalked up by Kenneth Frazier of Merck & Co. Inc. (NYSE:MRK) and recently retired Ian Read of Pfizer Inc. (NYSE:PFE), with multiples of 1.5 and 1.3.

Disclosure: The author has positions in JNJ and BMY.

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About the author:

Barry Cohen
Barry Cohen has nearly 40 years experience in communications and marketing, the majority in senior positions at large international health care companies, including Abbott Laboratories and Bayer Inc.

He has contributed to a number of financial websites, writing primarily about the stocks of health care companies.

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