BOSTON, Nov. 6 With the past quarter experiencingunprecedented market ups and downs, life sciences companies are re-evaluatingperformance metrics, targets, and overall spending. As a result, emergingcompensation trends in this turbulent economy point to continued focus on "payfor performance," as well as enhanced discussion and scrutiny of executivecompensation programs and processes. These issues and others -- includingfindings from the most recent annual life sciences compensation study releasedtoday by leading executive search firm J. Robert Scott, international law firmWilmerHale, and professional services firm Ernst & Young LLP -- will bediscussed by a panel of experts at a November 7 webcast.
"It will be both timely and compelling to discuss our most recent surveyand the insight it lends to some of the emerging trends we've seen in themarketplace over the last few months," said Bruce Rychlik, managing directorof J. Robert Scott. "Our distinguished webcast panel will tie survey datainto current compensation changes, and discuss projections for what we canexpect to see in the foreseeable future for executive compensation."
The nationwide study is the most comprehensive survey of executivecompensation among privately-held, emerging life sciences companies and thefirst to make this information readily available. Now in its seventh year,the annual report is used as an authoritative guide by venture capital firmsand their portfolio companies in making critical decisions regardingattracting, rewarding and retaining key talent. The study results serve as avaluable tool in helping businesses and executives understand today'scompensation trends for senior executives within privately-held therapeutic,diagnostic, medical device, instrumentation and platform companies.
Study results are available to the public at http://www.compstudy.com andwill be analyzed in detail during an interactive webcast on Friday, November 7at 1:30 p.m. - 3 p.m. EST by executives from J. Robert Scott, Ernst & YoungLLP, and WilmerHale. To register for the webcast, visithttp://webcast.ey.com/thoughtcenter/default.aspx?pid=1345.
"Private life sciences companies need to constantly assess the job marketand executive compensation practices to attract, motivate, and retain keyexecutives who will help their businesses sustain growth," explains BryanPearce, Northeast Strategic Growth Markets Leader for Ernst & Young LLP."Turbulent economic times often provide a great environment to upgradeleadership talent."
Key findings identified in this year's survey include:
1. Base salary increased an average of 5.2 percent across all of thepositions surveyed from 2007 to 2008. No individual position saw a decreasein base salary during this period. Additionally, non-founder CEOs experienceda 5.9 percent increase in base salary from 2007 to 2008.
2. Bonus attainment for the average CEO was 69 percent, one of the lowestfigures across the positions surveyed.
3. Total average equity holdings across the 13 executive positionssurveyed represents 18.16 percent of the fully-diluted company, a slightincrease from 18.08 percent in the 2007 report and above 2006 data at 16.20percent.
4. With increasing company size, the CEO generally earns a graduallylarger total cash compensation package. For companies with 1-10 FTEs, the CEOholds 9.07 percent, dropping to approximately 4.50 percent for each of thelarger company segments.
5. There is a steep rise in bonus for the CEO at the 75th percentile incompanies having raised 4 or more rounds of financing.
One hundred eighty-nine privately-held life sciences and medical devicecompanies throughout the United States took part in the survey which delvedinto the compensation, bonus, and equity packages of 13 key executivepositions, including Chief Executive Officer, President/Chief OperatingOfficer, Chief Financial Officer, Chief Scientific Officer/Head of Research &Development, Chief Business Officer/Head of Business Development, Heads ofClinical Research, Regulatory Affairs, Manufacturing, Sales, Marketing,Engineering, Human Resources, and Chief Technology Officer. Data is analyzedin aggregate with detailed views by position looking at: industry vertical,product stage, headcount, geography, founder status, and financing stage.
J. Robert Scott
J. Robert Scott is a global, retainer-based executive search firmspecializing in recruiting senior executives for companies in the technology,biomedical, biopharmaceutical, financial services, and higher education/notfor profit fields. J. Robert Scott is headquartered in Boston, Massachusettswith offices in San Francisco, London, Hong Kong, and Singapore. Additionalinformation about the firm can be found at http://www.j-robert-scott.com.
Ernst & Young
Ernst & Young is a global leader in assurance, tax, transaction andadvisory services. Worldwide, our 135,000 people are united by our sharedvalues and an unwavering commitment to quality. We make a difference byhelping our people, our clients and our wider communities achieve theirpotential. For more information, please visit http://www.ey.com.
Ernst & Young refers to the global organization of member firms of Ernst &Young Global Limited, each of which is a separate legal entity.
This news release has been issued by Ernst & Young LLP, a member firm ofErnst & Young Global Limited.
Wilmer Cutler Pickering Hale and Dorr LLP
WilmerHale provides legal representation across a comprehensive range ofpractice areas that are critical to the success of its clients. The lawfirm's leading intellectual property, litigation/controversy, regulatory andgovernment affairs, securities, and transactional groups participate in someof the highest-profile legal and policy matters. With a staunch commitment topublic service, the firm is renowned as a leader in pro bono representation.WilmerHale has more than 1,000 lawyers in 11 cities worldwide. For moreinformation, please visit http://www.wilmerhale.com.
SOURCE J. Robert Scott