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2008 Compensation and Entrepreneurship Report Highlights Executive Compensation Trends at Emerging Life Sciences Firms
Date:11/6/2008

Expert Trend Analysis and Survey Findings Disclosed at Nov. 7 Webcast

BOSTON, Nov. 6 /PRNewswire/ -- With the past quarter experiencing unprecedented market ups and downs, life sciences companies are re-evaluating performance metrics, targets, and overall spending. As a result, emerging compensation trends in this turbulent economy point to continued focus on "pay for performance," as well as enhanced discussion and scrutiny of executive compensation programs and processes. These issues and others -- including findings from the most recent annual life sciences compensation study released today by leading executive search firm J. Robert Scott, international law firm WilmerHale, and professional services firm Ernst & Young LLP -- will be discussed by a panel of experts at a November 7 webcast.

"It will be both timely and compelling to discuss our most recent survey and the insight it lends to some of the emerging trends we've seen in the marketplace over the last few months," said Bruce Rychlik, managing director of J. Robert Scott. "Our distinguished webcast panel will tie survey data into current compensation changes, and discuss projections for what we can expect to see in the foreseeable future for executive compensation."

The nationwide study is the most comprehensive survey of executive compensation among privately-held, emerging life sciences companies and the first to make this information readily available. Now in its seventh year, the annual report is used as an authoritative guide by venture capital firms and their portfolio companies in making critical decisions regarding attracting, rewarding and retaining key talent. The study results serve as a valuable tool in helping businesses and executives understand today's compensation trends for senior executives within privately-held therapeutic, diagnostic, medical device, instrumentation and platform companies.

Study results are available to the public at http://www.compstudy.com and will be analyzed in detail during an interactive webcast on Friday, November 7 at 1:30 p.m. - 3 p.m. EST by executives from J. Robert Scott, Ernst & Young LLP, and WilmerHale. To register for the webcast, visit http://webcast.ey.com/thoughtcenter/default.aspx?pid=1345.

"Private life sciences companies need to constantly assess the job market and executive compensation practices to attract, motivate, and retain key executives who will help their businesses sustain growth," explains Bryan Pearce, Northeast Strategic Growth Markets Leader for Ernst & Young LLP. "Turbulent economic times often provide a great environment to upgrade leadership talent."

Key findings identified in this year's survey include:

1. Base salary increased an average of 5.2 percent across all of the positions surveyed from 2007 to 2008. No individual position saw a decrease in base salary during this period. Additionally, non-founder CEOs experienced a 5.9 percent increase in base salary from 2007 to 2008.

2. Bonus attainment for the average CEO was 69 percent, one of the lowest figures across the positions surveyed.

3. Total average equity holdings across the 13 executive positions surveyed represents 18.16 percent of the fully-diluted company, a slight increase from 18.08 percent in the 2007 report and above 2006 data at 16.20 percent.

4. With increasing company size, the CEO generally earns a gradually larger total cash compensation package. For companies with 1-10 FTEs, the CEO holds 9.07 percent, dropping to approximately 4.50 percent for each of the larger company segments.

5. There is a steep rise in bonus for the CEO at the 75th percentile in companies having raised 4 or more rounds of financing.

Methodology

One hundred eighty-nine privately-held life sciences and medical device companies throughout the United States took part in the survey which delved into the compensation, bonus, and equity packages of 13 key executive positions, including Chief Executive Officer, President/Chief Operating Officer, Chief Financial Officer, Chief Scientific Officer/Head of Research & Development, Chief Business Officer/Head of Business Development, Heads of Clinical Research, Regulatory Affairs, Manufacturing, Sales, Marketing, Engineering, Human Resources, and Chief Technology Officer. Data is analyzed in aggregate with detailed views by position looking at: industry vertical, product stage, headcount, geography, founder status, and financing stage.

J. Robert Scott

J. Robert Scott is a global, retainer-based executive search firm specializing in recruiting senior executives for companies in the technology, biomedical, biopharmaceutical, financial services, and higher education/not for profit fields. J. Robert Scott is headquartered in Boston, Massachusetts with offices in San Francisco, London, Hong Kong, and Singapore. Additional information about the firm can be found at http://www.j-robert-scott.com.

Ernst & Young

Ernst & Young is a global leader in assurance, tax, transaction and advisory services. Worldwide, our 135,000 people are united by our shared values and an unwavering commitment to quality. We make a difference by helping our people, our clients and our wider communities achieve their potential. For more information, please visit http://www.ey.com.

Ernst & Young refers to the global organization of member firms of Ernst & Young Global Limited, each of which is a separate legal entity.

This news release has been issued by Ernst & Young LLP, a member firm of Ernst & Young Global Limited.

Wilmer Cutler Pickering Hale and Dorr LLP

WilmerHale provides legal representation across a comprehensive range of practice areas that are critical to the success of its clients. The law firm's leading intellectual property, litigation/controversy, regulatory and government affairs, securities, and transactional groups participate in some of the highest-profile legal and policy matters. With a staunch commitment to public service, the firm is renowned as a leader in pro bono representation. WilmerHale has more than 1,000 lawyers in 11 cities worldwide. For more information, please visit http://www.wilmerhale.com.


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SOURCE J. Robert Scott
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