Shire boosts CEO Ornskov's pay in light of "exceptional performance"
- Given Flemming Ornskov's "exceptional performance," Shire's board increased his total compensation to $21.6 million. In a year when Shire finally made a deal to acquire Baxalta, the drugmarker wanted to increase Ornskov's incentive to stay at Shire.
- The raise took effect on July 1, 2015. Of the total compensation package, $16.8 million is in long-term incentive awards, with another $1.69 million in base salary---a 25% increase. The increase came before Shire announced its $32 billion acquisition of Baxalta in January.
- Since the raise is considered 'atypical,' Ornskov's salary will be frozen for three years.
It took a while, but Shire's acquisition of Baxalta earlier this year signaled a positive step forward for the Dublin-based company. Five days before the deal with Shire was finalized, Baxalta sealed a $1.6 billion immuno-oncology deal with Denmark-based Symphogen, rounding out its portfolio nicely.
Shire's potential revenue jumped considerably post-merger. Estimates are that with the integration of Baxalta, Shire will generate more than $20 billion in annual revenues by 2020, according to the company. Additionally, the deal will result in $500 million in "annual cost synergies," produced by improved efficiency and scale.
Given that Ornskov played a crucial role in the complex, and at times tense, negotiation to acquire Baxalta, his long-term tenure is critical for the company.
With the raise, Ornskov is now in the big leagues of pharma executive compensation packages. He now makes almost twice as much as AstraZeneca's CEO Pascal Soriot and now out-earns Baxalta's Ludwig Hanston, who made $18.6 million last year.
Under Ornskov's leadership, Shire's market value has effectively doubled to $33.5 million, according to Bloomberg.