IMS CEO’s $25.9 Million Pay Tops Biggest Health CompaniesCynthia Koons and Brandon Kochkodin
IMS Health Holdings Inc. paid its CEO $25.9 million for last year, making Ari Bousbib better compensated than the heads of some of the biggest health-care companies in the U.S., despite IMS being only a fraction of their size and posting a 2014 loss.
Johnson & Johnson, for comparison, is the world’s biggest maker of health-care products with $74.3 billion of sales last year. IMS sold $2.64 billion last year -- 3.6 percent of what J&J did. Pfizer Inc., the biggest U.S. drugmaker, has a market capitalization about 25 times that of IMS.
Both of their chief executive officers made less than Bousbib.
For 2014, the IMS CEO got $1.6 million in salary, $4.4 million in non-stock incentives and $19.5 million in stock, as well as pension and other payments. In total, that’s $1 million more than J&J’s Alex Gorsky and $2.6 million more than Pfizer’s Ian Read, according to data compiled by Bloomberg. Many health companies haven’t yet reported 2014 CEO pay.
Bousbib’s stock award is a one-time grant given ahead of an initial public offering last year, and is a “long-term retention vehicle” that was fully disclosed to investors ahead of last year’s $1.3 billion IPO, said Tor Constantino, a spokesman for Danbury, Connecticut-based IMS.
It’s also millions of dollars bigger than other recent IPO payouts given to CEOs.
When animal health company Zoetis Inc. spun out of Pfizer Inc. in 2013, its CEO received $6.6 million in pay for that year, $2.46 million of which came from stock awards and $2 million from options. And when hotel chain Hilton Worldwide Holdings Inc. raised $2.35 billion in an IPO in 2013, coming out of private equity hands, its chief received $2.26 million in pay for the year, none of which came in the form of stock awards.
Bousbib’s salary of $1.6 million is up 33 percent from the previous year. He’s not collecting a bonus. Analysts have also cut their forecast of 2015 adjusted earnings.
IMS shares rose less than 1 percent to $25.43 at 3:35 p.m. in New York.
“The salary sounds in line, the stock awards seem a little bit high relative to the company’s growth rate,” Eugene Mannheimer, analyst at Topeka Capital Markets Inc., said in a telephone interview. IMS’s revenue rose 3.8 percent in 2014 from the year prior.
Bousbib joined the 61-year-old medical information technology and consulting firm in 2010. That was a year after IMS agreed to sell itself to a group of investment firms led by TPG Capital and the CPP Investment Board for $5.2 billion in what was one of the biggest leveraged buyouts of 2009.
Before joining IMS, Bousbib served as the CEO of the Otis Elevator division of United Technologies Corp. and was a partner at Booz Allen Hamilton Inc., a consulting firm.
IMS reported a net loss of $189 million for 2014, down from a profit of $82 million the year prior. Mannheimer said that’s largely because of the interest expenses on the company’s $3.43 billion of net debt.