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Pfizer just announced final results saying its vaccine is 95% effective against COVID-19. From $9 million to $18 million, here's how much their executives were paid in 2019.

  • Pfizer just announced its final vaccine efficacy results, with 95% effectiveness against COVID-19, even more promising than the 90% effective rate announced from preliminary data on November 9. The firm plans to submit the vaccine to the FDA within days. 
  • The pharmaceutical firm, which is known for drugs such as Advil, Robitussin, Viagra, and Xanax, paid its executives an average of $12.8 million in 2019. CEO Albert Bourla had total compensation listed at almost $18 million. 
  • For each executive, around 50% or more of total reported compensation was paid in equity.  
  • On November 9, the day the preliminary results were announced, the CEO of Pfizer sold 62% of his shares, a value of $5.6 million, as part of a predetermined trading plan.
  • Visit Business Insider's homepage for more stories.

Pharmaceutical giant Pfizer and biotech firm BioNTech have been working for eight months to develop a vaccine that combats COVID-19. On Wednesday, the partnership provided final efficacy results, announcing a 95% effective rate. The firm plans to submit the vaccine to the FDA within days. 

This is even more promising than the company's preliminary results announced November 9, when the partnership reported that the vaccine was more than 90% effective in preventing COVID-19.

While the FDA approval process and distribution of this drug could still take several months, this is still an unprecedented scientific feat, especially given the current wave of COVID-19 cases sweeping across the nation. 

Pfizer is not new to success in the pharmaceutical industry — it's known for drugs such as Advil, Robitussin, Viagra, Zoloft, and Xanax — and their executives are paid a lot of money to keep the firm successful. 

Pfizer's executive compensation 

Pfizer's executives are paid millions each year. Let's look at how this breaks down. 

In the chart below, we show compensation for each executive as it was presented in summary compensation table in Pfizer's proxy statement, split out by element. Hold your cursor over the labels at the top to highlight the different parts of the executives' compensation, and reference the bulleted list below for more information on each compensation element. 

Public companies have to disclose compensation for the CEO, CFO, and three otherwise highest-paid employees in their annual SEC filings. Typically included in the disclosure are a few main compensation elements: salary, short-term compensation, long-term compensation, and other compensation.

Short-term and long-term compensation are types of incentive programs — an executive has to perform against specific goals in order to be paid. The reward for achievement against short-term goals is usually paid in cash, while the award for achievement against long-term goals is usually paid in equity. 

Pfizer's top five executives — including its CEO, CFO, executive chairman, chief scientific officer, and chief business officer — earned an average of $1.4 million in 2019 salary and $12.8 million in 2019 total reported compensation. CEO Albert Bourla had the highest recorded salary and total compensation, at $1.6 million and almost $18 million, respectively.

The majority of each of the executives' total reported compensation was made up of equity awards, except for John Young, the chief business officer for Pfizer. Young's equity made up 47% of total reported compensation. Short- and long-term compensation was based on a number of metrics in 2019: revenue, earnings per share, cash flow, and total shareholder value. Compensation was decided based on performance against these metrics in 2019.

It's worth noting that on Monday, after the successful vaccine trial was announced, Bourla sold off 62% of his shares, a value of $5.6 million. The sale was part of a plan that allows executives to sell shares periodically, as long as they hit a predetermined price determined in August of this year. According to analysis by Business Insider, the shares were sold after Pfizer's share price jumped as much as 15% Monday in the wake of Pfizer's announcement. Bourla's shares were sold at an average price of $41.94 per share, close to the highest share price this year.

What the terms in the table mean:

  • Salary: The salary an executive earns in a given year. 
  • Stock awards/option awards: Equity awards based on achievement within a firm's long-term incentive plan. Long-term incentives are also considered "at-risk" pay. Stock and option awards are two different types of equity awards — stocks are direct equity awards, while options give the executive the right to buy shares at a specific price.
  • NEIP: Typically cash grants for performance in the short term. Bonuses are typically one-off awards, while anything in the column titled "non-equity incentive plan" typically means the awards are granted as part of a firm's short-term incentive plan and granted in cash (hence the "non-equity" label). Short-term incentives are thought of as part of "at-risk" pay, meaning that the executive must hit goals or benchmarks to receive the award.
  • Other compensation: This number includes any value from the compensation data related to pension plans or nonqualified deferred-compensation earnings. It also includes any payments designated as "other compensation," which can include payment for things like personal or home security, employees' benefits plans, country-club fees, fees related to use of company aircraft, and even relocation expenses. 
  • Total compensation: All amounts summed. 

Get the latest Pfizer stock price here.

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