As the biotech industry has hit profitability in recent years, with record market values and a steady drumbeat of regulatory approvals for its products, compensation for its executives has in turn climbed steadily. Whereas the global financial downturn produced a road bump that sidetracked many companies—and wrecked others—recent signs show a sector that has navigated its way back onto the highway and is picking up speed.

The 2013 BioWorld Executive Compensation Report1 tracks the annual compensation for biopharmaceutical executives at 258 companies (including 55 non-US companies) based on filings submitted to the US Securities and Exchange Commission. Here we focus on R&D officers, which includes such positions as chief medical officer, chief scientific officer, chief development officer, research executives, R&D executives, development executives and clinical development executives. Table 1 ranks the top 20 earners, all from US companies, who earned anywhere from $662,000 to $2.55 million in the 2011 fiscal year. We note that the scientists ranked number 1, 6 and 14 have in the past published original research in Nature Biotechnology.

Table 1 Biotech R&D officers by annual compensation

Figure 1 breaks down the median direct compensation package for this group. We see that in addition to salary and bonus, long-term incentives such as stock, stock options and long-term cash awards can double total compensation for R&D officers. Figure 2 shows the total compensation for R&D officers at all companies, broken down into total cash compensation (base salary, bonuses, commissions, cash profit-sharing and other forms of variable cash payments), total direct compensation (total cash compensation and total fair value of all long-term incentives) and total realized direct compensation (total direct compensation and total long-term incentive value realized).

Figure 1: Biotech R&D officers' median annual direct compensation package.
figure 1

Long-term incentives include but are not limited to stock option awards, restricted stock shares/units, performance stock shares/units, phantom stock shares, stock appreciation rights and long-term cash awards.

Figure 2
figure 2

Biotech R&D officers total compensation for all companies by type, measured by percentiles.