Agenda: Talent Demand, Pandemic May Drive Comp Higher in Healthcare
December 2, 2020
Indeed, healthcare companies like Pfizer and Moderna have announced vaccines with efficacy rates of 95% and 94.5%, which sent their stock prices soaring. Pfizer CEO Albert Bourla’s stock holdings have increased by $3.4 million since the start of the year (he has sold $7.9 million worth of stock, the timing of which has been called into question), while Moderna CEO Stephane Bancel’s stock holdings have increased by $1.4 billion, according to the Farient Advisors Wealth Tracker.
Dayna Harris and Marc Hodak, partners at Farient Advisors, agree that pay in the healthcare industry for 2020 will vary based on which part of the industry they operate in. They mentioned that many companies have been “set back financially due to Covid,” particularly those that had to cut back on elective procedures, and the costs associated with safety measures for employees and patients.
“Health insurance and managed healthcare companies may fare better as a result with fewer claims from these reductions, and depending on how they manage increased costs associated with operating in a Covid-19 environment, may even be performing decently,” Harris says.
As it relates to pay, Harris says “the treatment of incentive payouts will differ depending on how hard-hit, or not materially affected, the company is. Some use of discretion may occur for those healthcare companies operating in the harder-hit part of the industry, if it is affordable and not excessive; however, for those parts of the industry that are not negatively affected, incentives are more likely to follow the plan.”
Hodak says, “As far as I can tell, the executive pay implications have been to revert to largely discretionary bonuses, based on general goals of maintaining operations as effectively as possible, with the government assistance that had been made available, while moving forward as best as possible on their long-term operational and strategic initiatives.”
About Dayna Harris
Partner, Farient Advisors, Los Angeles
Dayna has served as a consultant on executive and board compensation for two decades, designing incentive programs that align compensation with business strategy and create value for shareholders. Her experience includes advising boards and senior management of public and private companies across various industries. She works with management and boards to reach a consensus on program design that is effective within the context of a company’s organizational structure and situation.
Further, her incentive design work identifies the appropriate frameworks, performance measures, and approaches for goal setting. Before joining Farient, Dayna was a principal at Semler Brossy Consulting Group and held executive compensation consulting roles at Sibson & Company, SCA Consulting, and Mercer.
She frequently speaks on topics including pay and performance, disclosure, and regulatory compliance for the National Association of Corporate Directors (NACD), WorldatWork, the National Association of Stock Plan Professionals (NASPP), the Council of Institutional Investors, and the Society of Corporate Governance Professionals. Dayna is a member of WorldatWork, NASPP, the Council of Institutional Investors, and NACD. For three years, Dayna was named to the NACD Directorship 100, the prestigious annual list of the most influential people in corporate governance and the boardroom. She holds both an MBA and a bachelor’s degree from San Diego State University.
About Marc Hodak
Partner, Farient Advisors, Dallas
Marc works closely with senior management, boards of directors, and investors, in both public and private companies to develop executive compensation programs that are shareholder-friendly, attractive to management, and responsive to the needs and concerns of boards.
He is a recognized thought leader in incentive plan design. His articles have been published in numerous magazines, including Forbes, NACD Directorship, Directors & Boards, and academic journals. He has been quoted in the national press, including the Wall Street Journal, Bloomberg, and Reuters.
He is a sought-after speaker at forums and conferences throughout the U.S. and Europe on executive compensation, corporate governance, and value management. Marc was named to the 2020 NACD Directorship 100, a list of the most influential people in corporate governance and the boardroom.
For the last 10 years, Marc has taught corporate governance as a professor at New York University’s Stern School and as visiting lecturer at the University of St. Gallen in Switzerland. Before joining Farient Advisors, Marc was the principal at Hodak Value Advisors and led value-based management implementation and related projects at Stern Stewart & Co. He earned his MBA in finance from the University of Pennsylvania Wharton School and a BS in aerospace engineering from the University of Maryland.