Health care CEO pay outstrips infectious disease research
The CEOs of 179 health care companies took home almost $2.5 billion in 2019, a majority of which came from cashing out stock, according to an Axios analysis of financial filings.
The big picture: That amount is four times what the Centers for Disease Control and Prevention had to study and prepare for all "emerging and zoonotic infectious diseases" last year, right before the novel coronavirus outbreak turned into a global pandemic.
By the numbers: The median pay of a health care CEO in 2019 was roughly $8 million, similar to 2018. Seventeen CEOs made more than $30 million each.
- The figures were calculated by using actual realized gains of stock options and awards, which are in the annual proxy disclosures companies file with the Securities and Exchange Commission.
The highest-paid health care CEO in 2019 was Abiomed's Michael Minogue, who made $123 million — equal to roughly 16% of the medical device firm's revenue and half of its profit.
- A spokesperson said in a statement that a vast majority of Minogue's 2019 compensation "originates from stock options and performance shares awarded over the previous 10 years." He "still owns the exercised and vested shares, is one of the larger shareholders in the company, and is currently not taking a salary during the coronavirus pandemic."
- In 2019, Abiomed and physicians who accept money from the company lobbied the federal government to squash a proposal that would've cut Medicare payments for surgeries involving Abiomed's heart pumps. They won.
Between the lines: Support for Medicare for All dangled over the industry throughout 2019 and damaged companies' stock prices. But stocks eventually rebounded in the last two months of the year, as Wall Street forecasted a very profitable election year.
- And higher stock prices led to more big payouts for executives at the top.
Worth noting: This year's analysis removed several CEOs whose companies were acquired, and it does not include their "golden parachute" payouts.
- For example, the analysis excludes The Medicines Co.'s Mark Timney, who got $66.3 million after Novartis acquired his company; Ken Burdick of WellCare Health Plans, who cashed out $46.8 million after Centene's deal; and Allergan's Brent Saunders, who pocketed $38.7 million from AbbVie's buyout.
- The analysis also does not include 2019 compensation for top executives at not-for-profit hospital systems and most Blue Cross Blue Shield insurers because it was not available.