For its annual executive compensation survey, IBO has prepared and analyzed the summary compensation tables from the SEC proxy statements of 16 CEOs and 16 named executives of dedicated business units from a total of 19 analytical instrument and laboratory product companies. Compensation packages can vary year over year, based on achieved performance targets, timing of equity awards, promotions and discretionary measures, among other influences. The year “2017” refers to each company’s fiscal year.

Total compensation growth for CEOs and named executive officers of publicly held laboratory instrument and product companies was up in 2017. This solid growth in compensation for the year was driven by strong overall earnings and operating results. Total compensation for all executives in the tables below, which only includes those executives who have served in their respective roles for more than one year, advanced 15% on average in 2017.

CEOs’ Compensation

Total average compensation for the 16 CEOs in the table rose 15% to $8.5 million in 2017, driven by double-digit growth in both cash and equity compensation. Cash compensation, which consists of a base salary, cash bonuses and incentives, grew around 17% on average. The average value of combined stock and option awards grew 10% to $5.1 million to account for 60% of total compensation. More than half the CEOs recorded equity grants valued at more than $5 million, including more than $15 million for Mark N. Casper, president and CEO of Thermo Fisher Scientific.

Average base salaries grew modestly in 2017, increasing 5% on average. For the the majority of CEOs in the table, base salaries represented 11% of total compensation. President and CEO of Agilent Technologies, Michael R. McMullen, received a 5% pay raise, down from last year’s increase of 11% (see IBO 4/30/17).

However, base salary was unchanged for Mettler-Toledo President and CEO Olivier A. Filioli. Mr Filioli once again received a base salary of $851,642 in 2017. And Michael Hunkapiller, PhD, president and CEO of Pacific Biosciences, once again opted for an annual base salary of only $1, given the company’s financial deficit.

Accounting for 24% of total CEO compensation, in 2017, average cash incentive awards grew at a significant pace for CEOs in the table, advancing 23% to $2.0 million. The increase was mainly due to the financial success of the majority of the 16 CEOs in the list.

In contrast to 2016, the split between stock- and option-based rewards in 2017 leaned more towards the former. The average amount of CEO stock-based compensation in 2017 amounted to $3.06 million, versus an average of $2.06 million for option-based compensations. Option grants this year remained modest, increasing at just 5.6%, while stock rewards jumped 13.8%. Mr. McMullen received $7.2 million in stock grants, while receiving no option rewards. Becton, Dickinson President and CEO Vincent A. Forlenza obtained $5.6 million in stock-based compensation and $3.8 million in option-based rewards. The same pattern is evident for the majority of the 16 CEOs in the table.

Illumina CEO Francis A. deSouza, after failing last year to reach the minimum financial thresholds to be eligible for cash awards, met such standards this year and in return, received a $901,000 cash incentive. Mr. deSouza amassed a total of $1.75 million in cash compensation for the year, a 119% increase.

For the fifth consecutive year, Dr. Hunkapiller again waived off all bonus incentives.

Largest Compensation

Thermo Fisher recorded another year of double-digit revenue growth, advancing 14.5% to $20.9 billion. As such, Mr.  Casper amassed the highest total compensation amongst the list of presidents and CEOs in the tables.  Mr. Casper received a total compensation package of $22.27 million, an increase of 25%. The pay increase was primarily driven by stock and option grants, which jumped 36% to $15.93 million. But short-term compensation, including cash incentives, increased just 3.3% to $4.4 million. Mr. Casper was the only executive in the table to receive a total compensation package of over $20 million.

The second-highest total compensation package was paid to Wendell P. Weeks, chairman, president and CEO, of Corning. Mr. Weeks’ total compensation for the year amounted to $16.87 million, an increase of 49%. The majority of Mr. Weeks’ growth in total compensation was due to cash incentives, which were up 60.7% to $9.24 million.

Danaher President and CEO Thomas P. Joyce also received a significant total compensation package, following the company’s strong financial results for the year. Mr. Joyce’s total compensation for the year increased 14% to $14.78 million, mainly driven by a 27% increase in equity compensation. Cash compensation for Mr. Joyce, however, fell 7% to $4.3 million.

Notable Pay Changes

Total compensation for QIAGEN CEO Peer M. Schatz grew the fastest, vaulting 81% to $2.4 million. Mr. Schatz benefited from a one-time bonus of $671,000, a significant increase over the previous year’s bonus of $165,000. Mr. Schatz also received $455,000 in stock grants, along with $74,000 in option grants to amount to a total of $519,000 in equity compensation. Last year, Mr. Schatz did not receive any equity compensation.

Mr. Weeks, along with Frank H. Laukien, PhD of Bruker, both experienced total compensation increases of over 40%. The former experienced a 50% increase in cash compensation for the year, driven by a $9.24 million incentive, to $10.6 million. However, stock and option grants for Mr. Weeks remained modest, increasing just 6.3%.

As for the latter, both cash and equity compensations grew double digits for Dr. Laukien. He earned a 58% increase in cash compensation, amounting to $2.19 million. Additionally, he also experienced a 31% growth in equity compensation, driven mostly by an increase in stock grants. 

Conversely, Dr. Hunkapiller experienced the greatest decrease in total compensation, falling 32% to $1.34 million.

Executives of Dedicated Business Units

Total average compensation for active named executives in the table of dedicated business units at instrument and lab-related businesses advanced 24% to $2.6 million in 2017. Similar to the list of CEOs, compensation for named executives varied by the performance and size of dedicated business unit.

Average base salary for the 16 business-segment executives increased double digits, up 13% to $475.3 thousand. Along with cash incentives, which averaged $438,700, average cash compensation advanced 16% to $920,800. Base salary and cash incentives accounted for 18% and 17% of total compensation, respectively.

Average equity compensation for executives of dedicated business units expanded the fastest among option-based compensation, rising 78% to $738.7 million and also representing 28% of total compensation. However, stock-based rewards grew at a slower pace, expanding 19% to $809,900.

But other compensation fell drastically, decreasing 33% due to the absence of last year’s $1.5 million and $1.0 million relocation payments for Patrick Kaltenbach and Jacob Thaysen, PhD, the senior vice presidents and presidents of Agilent’s Life Sciences & Applied Markets and Diagnostics & Genomics Groups, respectively.

In 2017, the largest compensation package for executives of dedicated business units belonged to Thermo Fisher executive vice president and president of Life Sciences Solutions Mark P. Stevenson. Mr. Stevenson’s total compensation soared 77% to $12.3 million, surpassing the rest of the table’s executives in pay.

The most notable change in compensation among named executives of dedicated business units was for David T. Hore, president of Sensors for MTS Systems, as a result of an improved base salary. His stock-based rewards amounted to $206,200, while his option grants totaled $63,400. Mr. Hore’s total compensation leaped 94% to $794,400.

Also, despite making the top five list, Mr. Kaltenbach suffered a 19% loss in total compensation to $3.5 million, the largest decline among business unit executives, primarily due to decreased compensation from last year’s relocation payment.

Realized Pay

Realized pay is an alternative calculation of executive compensation, which consists of base salary, cash incentives, vested restricted stock and gains from stock options exercised. In contrast to “total compensation,” this methodology is considered by some to be a more accurate portrayal of payments received during the fiscal year, as it reflects the impact of stock price fluctuations when equities actually vest rather than estimates at prior grant periods.

In 2017, Mr. Casper recorded the largest realized pay among executives in the tables, valued at $32.1 million. Similarly, Mr. Joyce, along with Mr. Filiol recorded over $30.0 million of total realized compensation.