Biotech compensation survey results reflect more mature industry
The study, by Unifi Network, an HR consulting division of PricewaterhouseCoopers, focuses on the top 17 executive positions at 186 public biotechnology companies and was based on data from annual shareholder proxy statements and yearly reports released in 1999.
"Many biotechnology companies consider themselves genomics companies to some degree," said Deborah Bilak, senior consultant. " In conducting our analysis, we found that genomics companies compensate their executives with cash compensation (both base salaries and total cash compensation) packages that range between 15 and 20 percent higher than mainstream non-genomic biotechnology companies."
As the biotechnology industry matures, many companies are paying increased attention to bottom line numbers. However, because recruiting top talent is still critical to expansion, compensation packages are being structured differently, according to the survey results.
The study found biotechnology companies rewarding top executives with greater total cash (base and bonus) compensation packages than in the past. Base salaries are increasing, on average, between 5 and 7 percent annually.
Overall bonus payments were found to be between 25 and 35 percent of an executive's total compensation package for most executives, with bonus payments varying depending on market capitalization. Companies with market capitalization greater than $1billion have, in some cases, provided bonus payments of up to 60 percent of base compensation.
Additional evidence pointing towards the maturation of the industry as a whole includes employment agreements for CEOs (and other executives), most of which provide for one to two times base and bonus compensation in the event of a change in ownership or control, the study found.
"In an industry where critical mass and market capitalization are essential, increased industry consolidation is inevitable, Bilak said. "Reflecting this trend, companies are beginning to offer more lucrative executive compensation packages to balance out the risks of a merger or acquisition."
Copies of the survey can be purchased from the Unifi survey unit for $595 via the Customer Service Department at (203) 341-2227.
Edited by Steve Tarnoff
Managing Editor, HRHub.com
Starnoff@vertical.net