December 2, 2020
Agenda: Talent Demand, Pandemic May Drive Comp Higher in Health Care
By Stephanie Forshee
Indeed, 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 health care 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 care 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 health care 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.”