Top 10 Medical Device Industry CEO Salaries for 2011

By Mark Hollmer

As FierceMedicalDevices looks at CEO compensation for 2011 at the top 10 medical device companies, we see that it very much reflects an industry in transition. In many cases, the corporate titans on our list didn't even finish out the year, as new leadership took the stage to address controversies over quality or sluggish revenue. Some executives retired abruptly, defying expectations for longer tenures.

Take Johnson & Johnson's William Weldon, for example. His pay package tops our list, after already rocketing to the No. 1 slot of FiercePharma's 10 largest pharmaceutical CEO compensation packages for 2011. Weldon left, however, after facing a shareholder suit over his hefty pay. J&J ($JNJ) in the post-Weldon world has also been forced to confront unresolved production problems and continued recalls in many of its device-related and consumer products divisions. (Alex Gorsky took over this past spring.) But one of Weldon's major initiatives has finally made an impact: his proposed $21.3 billion buyout of Synthes, a Swiss-American maker of surgical tools and orthopedic implants. After more than a year, the bid finally crossed the regulatory finish line, first in Europe in April and in the U.S. in June, milestones that brought the historic acquisition to a close.

And then there's Medtronic ($MDT) Chairman and CEO William Hawkins, who unexpectedly announced plans to retire at the end of the company's 2011 fiscal year after the Minnesota device giant struggled to come up with new products to counter sluggish defibrillator and pacemaker sales. After years of choosing replacements from inside the company, Medtronic brought in Omar Ishrak, a veteran of GE Healthcare, to replace him. Hawkins left with a reduced package covering salary and performance-based stock incentives that was largely goal-based. But his "separation agreement" essentially paid him for another year--an additional $3.8 million lump sum severance (including, in part, two years of continued health and dental coverage), a $1.9 million prorated payment regarding his anticipated 2011-13 long-term performance plan award, and accelerated vesting of more than $8 million in stock options.

In the wake of flagging defibrillator and stent sales and an ongoing struggle to absorb its Guidant acquisition, Boston Scientific's ($BSX) transition through 2011 became even more pronounced. After a two-year tenure, then-BSX President and CEO J. Raymond Elliott abruptly announced his plans to leave in June 2011, but not without more than $2.6 million in total compensation. William Kucheman became the company's interim CEO last fall, after serving as executive vice president and group president of BSX's cardiology, rhythm and vascular unit. His total compensation reflects a pay rate from his old job and a prorated salary after taking on the CEO slot.

A full replacement is already partially in place. Michael Mahoney, formerly global chairman of Johnson & Johnson's medical device and diagnostics group, became Boston Scientific's president last fall and gained a nearly $11.8 million compensation package as a result. (Mahoney's base pay is just $187,397 for the year, also reflecting a prorated salary. But his overall package for 2011 was much larger with more than $9.5 million in stock awards, a $1.5 million bonus and other benefits.) He'll also take on the CEO role this November.

Abbott Laboratories ($ABT), meanwhile, capped 2011 with the announcement that it would split into separate pharmaceutical and medical products operations. Chairman and CEO Miles White will lead the medical products division. He completed what will likely be his last full year in charge of the combined operation with $24 million in total compensation. As high as that is--he ranks at No. 2 on this year's device CEO compensation list--it's still about 6% less than the $25.6 million he made the previous year. (Editor's note: Obviously, some of the executives on this list represent diversified companies in healthcare and, in the case of Philips, Siemens, and GE, other sectors as well.)

Frans van Houten
President and CEO - Philips

Total 2011 compensation: $2.38M (April-December 2011)

William Kucheman
Interim CEO - Boston Scientific

Total 2011 compensation: $4.6M

Peter Löscher
CEO - Siemens

Total 2011 compensation: $7.4M

José Almeida
President and CEO - Covidien

Total 2011 compensation: $9.4M

William Hawkins
Chairman and CEO - Medtronic

Total 2011 compensation: $5.5M (and $3.8M-plus severance)

Edward Ludwig
Chairman and CEO - Becton, Dickinson & Co.

Total 2011 compensation: $10M

Robert Parkinson Jr.
Chairman and CEO - Baxter International

Total 2011 compensation: $14M

Jeffrey Immelt
Chairman and CEO - General Electric

Total 2011 compensation: $21.5M

Miles White
Chairman and CEO - Abbott Labs

Total 2011 compensation: $24M

William Weldon
Chairman and CEO - Johnson & Johnson

Total 2011 compensation: $26.7M



Top 10 Medical Device Industry CEO Salaries for 2011