Executive Compensation at the Pharmaceutical Research and Manufacturers of America (PhRMA)
The most powerful drug industry lobbying organization in the US is the Pharmaceutical Research and Manufacturers of America (PhRMA) – a non-profit tax-exempt (as if the for-profit pharmaceutical industry needs to pay less taxes) 501 (c) (6) – a professional association – that represents the interests of its members (34 according to the organization’s website) who paid about $400 million in membership dues in 2017 (out of $456 million in total revenue; the remaining revenue came primarily from meetings, sections, and studies). This means, each member paid an average of $12 million annually in membership dues to PhRMA.
Based in Washington, DC, PhRMA has 12 offices in the US, Japan, and Dubai. According to the most recent IRS Form 990 (2017) filed with the IRS, PhRMA as 271 employees who were compensated $70 million, which equates to an average compensation of nearly $260,000.
The 21 most highly compensated employees were reported to be:
- $3,054,122: Stephen J Ubl, President and CEO
- $1,917,531: Lori Reilly, EVP, Policy Research
- $1,371,599: James Stansel, General Counsel and EVP, Law, Secretary
- $1,265,474: Rodger Currie, EVP, Advocacy
- $1,082,575: William Chin, CMO and EVP Science/Reg (thru December, 2017)
- $1,080,964: Jeffrey Bond, SVP, State Advocacy (thru March, 2017)
- $1,002,292: Scott Laganga, SVP State Gov’t Advocacy
- $ 923,385: Robert E Zirkelbach II, EVP Public Affairs
- $ 891,609: Jennifer Bryant, SVP Policy/Research
- $ 886,909: Scott Olsen, SVP, Federal Advocacy
- $ 817,906: Brian Toohey, SVP International Advocacy
- $ 769,415: Jay Taylor, VP International Advocacy
- $ 755,311: Paul Aines, CFO and EVP Accounting/Finance
- $ 669,964: Amy Jackson, Executive Director, International Advocacy
- $ 650,590: Stephen George Tilton, VP Federal Advocacy
- $ 571,401: Shannon Christine Monsif, SVP Alliance
- $ 560,192: Richard Moscicki, CMO and EVP Science/Reg
- $ 545,000: James Spears, Former Officer
- $ 533,302: Charles Clapton, SVP Gov’t Affairs/Policy (thru January, 2017)
- $ 387,697: Josephine Martin, Former Key Employee
- $ 319,560: Robin Palchus, SVP Human Resources
The 21 employees listed above received $20 million in compensation which equates to an average of almost $1 million each.
15 of the 21 (71%) most highly compensated employees are male while 6 of the 21 (29%) are female. Of the 10 most highly compensated employees, 8 are male while 2 are female.
The IRS Form 990 (2017) also reports the following information:
- PhRMA paid for first class or charter travel. Specifically, the President is authorized to fly first class.
- PhRMA paid for companion travel. Specifically, companions occasionally travel with executives on business travel. Companion travel is included in taxable income.
- PhRMA provided tax indemnification and gross up payments. Specifically, the Japan representative, an expatriate residing in Tokyo, Japan and one of PhRMA’s top five compensated employees, is tax equalized. In addition, gross up payments may be processed for PhRMA executives when a fringe benefit is considered tax income and there is a business requirement giving rise to the taxable fringe benefit.
- PhRMA paid for a housing allowance or a residence for personal use. Specifically, the apartment lease of the Japan representative who resides in Tokyo, Japan is paid for by PhRMA. The value of the apartment lease is include din the income of the Japan representative and tax equalized.
- PhRMA paid for health or social club dues or initiation fees. Specifically, all PhRMA employees are eligible to participate in a fitness club membership or may receive reimbursement up to a certain value (not specified) annually for a fitness club membership of their choosing. The value of this benefit is considered taxable income to the employee. The Japan representative belongs to the Tokyo American Club; the membership is paid for by PhRMA, included in the income of the Japan representative and tax equalized.
James Spears received a lump sum payment of $545,000.
Josephine Martin received a lump sum payment of $275,999.
James Clapton received a lump sum payment of $405,000.
PhRMA sponsors a non-qualified Section 457 (F) deferred compensation plan. Benefits awarded include:
- Stephen Ubl: $840,000
- James Stansel: $244,800
- Lori Reilly: $74,586, $235,664
- Rodger Currie: $228,800
- Robert Zirkelbach II: $176,800
- Scott Laganga: $34,988, $180,000
- Scott Olsen: $190,000
- Richard Moscickli: $210,000
- Jennifer Bryant: $61,437
- Jay Taylor: $37,800
PhRMA provided a $200,000 loan for a down payment on a house in the DC area. The balance is $200,000.
PhRMA paid Richard I Smith Consulting $502,015 for consulting services. Mr. Smith is a former key employee.
PhRMA is the direct controlling entity for 7 political organizations: PHRMA PAC, PHRMA Independent Expenditure Committee, PHRMA Colorado Action Fund, PHRMA Better Government Committee, PHRMA Tenn PAC, PHRMA California Initiative Fund, Healthy Nevada PAC.
To read the IRS Form 990 (2017) for PhRMA, click here.