Posted on February 6, 2012 by BioJobBlogger

Trouble in Big Pharma Land: Lilly Freezes Employee Salaries

The Pharmalot blog reported today that Eli Lilly & Co one of the more progressive big pharma companies to experiment with crowdsourcing and social media to generate new R&D opportunities today announced that it most company employees and executives will not receive base pay increases this year. The company did not announce a freeze in bonuses, however.

In a sign of solidarity with the 99 %, John Lechleiter, PhD Lilly’s outspoken and sometimes controversial CEO, requested that he not receive an increase to his $1.5 million annual salary and incentives. Interesting, as Ed Silverman cogently points out in the Pharmalot post, Lechleiter’s bonus target is 140% of his base salary which put his total compensation for the upcoming year at around $16.4 million!

Last week, the company disclosed that it missed analyst’s stock price estimates and its leading product Zyprexa (antipsychotic) yielded lower than expected sales revenues because of generic competition. Zyprexa sales dropped 44 percent in the fourth-quarter to $749.6 million.

Don’t be surprised if layoffs are next. It may be time for Lilly employees to dust off those CVs and resumes.

Until next time...

 

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Posted on February 18, 2010 by BioJobBlogger

Johnson & Johnson Freezes Salaries and Cuts Yearly Bonuses

Times are tough in the financially-struggling pharmaceutical industry and seemingly getting tougher.

First, Bristol-Myer Squibb (BMS) announced last week that it will freeze salaries but not cut yearly performance bonuses for its employees. One week later, Johnson & Johnson (J&J)—a company known not to be upstaged or outdone by a competitor—is planning on cutting the yearly performance-bonuses for 38% of its workforce and will freeze the salaries of certain other employees.

While BMS publicly announced its salary freeze, J&J plans were uncovered in an internal announcement and other company documents obtained by The Wall Street Journal. According to the Journal article, “The health-care giant told employees Jan. 25 that it is making the moves to standardize compensation across its various businesses and regions, thereby making it easier for its workers to move around within the company. In the U.S., the changes will bring bonus targets in line with market levels, one document said.”

Interestingly, J&J hasn't yet reported its CEO, William Weldon’s compensation for last year. In 2009, Mr. Weldon turned down a salary raise. His total compensation in 2008 fell 4.1% from the year before to $29.4 million, according to the most recent regulatory filing.

The salary freeze and bonus cuts help to explain why a good friend and lifelong J&J employee (25 years and counting) wasn’t too keen on the company during a visit earlier this week. During a conversation, in which I unknowingly lauded J&J’s treatment of its employees, my friend quipped “Looks can be deceiving; J&J is like every other big corporation. People really don’t matter—it’s all about P&L”

Until next time...

Good Luck and Good Job Hunting!!!!

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