So how is pharma doing compared to the S&P 500 ?
Let's start with Eli Lilly & Company. Sidney Taurel pulled down a total package worth more than $15 million yet look at Lilly's performance vs. the S&P 500.....
Lilly has never recovered from the loss of patent
on Prozac and now Zyprexa sales have reached a
peak.
Pretty dismal ha
? If this is a scorecard for the CEO's
performance then I think it's a pretty sad shape
of things overall. The stock options that I
received at Lilly over 7 years ago are worthless
and Lilly has never recovered from the loss of
patent on Prozac (the contingency plan was called
Year-X and was not strategic at all) and now
Zyprexa's days as a blockbuster are numbered.
What about Pfizer? Surely a company that markets
Viagra and Lipitor can beat the S&P ! Think
again... The recent clinical trial setback for
their new cholesterol drug and generic
competition looming for Zoloft and Lipitor have
hurt the pharma giant while Jeffery Kindler
pulled down a compensation package of more than
$9 million.
Pfizer's performance has been
dismal
Amgen is another
company, that until recently, had been doing very
well. The recent coverage of Aranesp has really
hurt their performance and the FDA has informed
Amgen to halt all DTC advertising (they weren't
doing any ?). Kevin Sharer the CEO of Amgen had a
lot of money to play with for the high cost of
living in California. His package was over $24
million !
Amgen has really been hurt by the
recent Aranesp problems
There have been
some companies that have managed to do well
against the S&P 500. Wyeth, whose CEO made a
whopping $32.9 million was one of those
companies. However, one has to ask if a
compensation package over $32 million is worth
this performance?
Wyeth has had some bumps in the road
but is performing well.
Kudos go to Mr
Cornelius of BMS. His compensation was more
reasonable in all this madness at only $1.5
million. I can tell you that in New Jersey that's
a good salary but not one that could let you live
as a king. It all comes down to a philosophy of
shareholders and the board:
"Are we here to
please Wall Street and increase shareholder
value? Or are we here to provide patients with
medicine that can extend lives and ensure that we
live a better quality of life?"
I for one believe that there is too much focus on trying to keep Wall Street happy and not enough focus on people. These two philosophies can coexist but it requires someone with foresight and vision to lead the charge. You would think for the money these guys are pulling down they could at least try and lead...