CAMBRIDGE, Mass. -- Public outrage last year over thehumongous pay, perks, bonuses and stock options showered ontop company executives in corporate America stirred theSecurity and Exchange Commission last October to issue tougher"Revised Executive Compensation Proxy Rules" for 1993.
At a two-hour breakfast roundtable here on Wednesday forsome 190 regional biotechnology executives and financiers,Larry S. Schumer, human resource advisory manager ofCoopers & Lybrand's Boston office, took his audience throughthe new SEC disclosure requirements line by line. His bottomline: Biotechnology companies are less vulnerable -- so far --than many other areas of industry.
"Historically, you haven't seen compensation abuses in thebiotechnology industry," Schumer told BioWorld. "However, asmore and more companies raise money the last couple of years,more and more executives start to request more cash.
"The company's compensation board people are still a little bitreluctant to give out a lot of cash, because they don'tnecessarily think that the company's success is just because theexecutive raised money," he said. "The SEC rules give themmore ammunition for holding back. Their disclosure forms maynot yet warrant bigger compensation, bigger cash."
Public accountants Coopers & Lybrand co-sponsored the eventwith J. Robert Scott (JRC), an executive search firm that yearlycanvasses executive compensation in the biotechnologyindustry. William A. Holodnak, JRC's founder and president,unveiled his 1993 survey of more than 400 executives in 120biotechnology companies, large and small, public and private.
JRC's survey, conducted by mailed questionnaire last fall,garnered a 10 percent response from the 1,200 companies ittargeted nationwide, with responses weighted toward small,private companies. Headhunter Holodnak points out, however,that aside from the top 50 superstar corporations dominatingthe field, his cut represents a valid cross-section of thebiotechnology industry.
JCR's bottom lines:
-- The chief executive officer of a privately held companyreceived an average of $150,863 in the current year vs.$136,125 the previous year -- up 9 percent. A publiccompany's CEO took home an average $247,852, current,compared with $212,764 previously -- an 8.6 percent bump.
-- These averages break out into a sliding scale of actualincomes, closely tracking company size. Thus, a CEO's currentbase salary in a company with fewer than 10 employeesaverages $83,600; for more than 100 staffers, $207,300.
-- Likewise, the team of top managers grows with companysize, from a lean head count of four team players -- CEO, chieffinancial officer, vice president of research and development,VP of operations -- in a company with 25 or fewer employees,to double that number -- adding VPs for sales and marketing,regulatory affairs, human resources and business development-- for one with 100 or more people on staff.
-- David N. Leff Science Editor
(c) 1997 American Health Consultants. All rights reserved.