Top 10 earners: Neil Sinclair reveals the best paid chief executives in chemicals and pharmaceutical industries with extensive European operations

Chemistry and Industry, Sept 8, 2008 by Neil Sinclair

[ILLUSTRATION OMITTED]

Establishing a direct causal link between remuneration and company performance is, at best, an inexact science. Uniformity between executive incentive packages is rare, making detailed comparisons of remuneration and its relationship with company performance difficult, if not impossible.

Nevertheless, the top ten best paid chemical and pharmaceutical chief executives does provide a remuneration yardstick by which the sector can be judged in relation to similar process industries that operate on a pan-European if not truly global scale.

It also underlines, in the chemicals, energy and pharmaceutical sector at least, the benefits of remaining loyal to one company. Almost all the top ten best paid chief executives have been 'one company' men, most with careers spanning over 30 years. Majoring in engineering at university also helps, as many of the top ten graduated in this discipline.

The list ranks executives according to their publicly declared remuneration in 2007. Remuneration includes basic salary, bonuses and share options at 'fair value'. Variable and often complex methods of exercising share options and calculating share values means that direct comparisons can sometimes be misleading.

Excluded from the list are company executives such as Jim Ratcliffe, chief executive of privately-owned chemicals group Ineos, for whom remuneration data are not publicly available.

[ILLUSTRATION OMITTED]

Jeroen van der Veer

1 shell 6.50m [euro]

Born in Utrecht, Netherlands in 1947, Jeroen van der Veer joined Shell in 1971 after graduating from Delft University with a degree in mechanical engineering. He later earned an MSc degree in economics from Erasmus University.

In his early years with Shell, Van der Veer worked in manufacturing and marketing in the Netherlands, Curacao in the Caribbean and the UK.

In 1995, he was promoted to president and chief executive of Shell Chemical Company in the US. Van der Veer was appointed a group managing director in 1997, retaining responsibility for chemicals. He managed a major restructuring of Shell's chemicals interest which saw the company exit from several non-core businesses to focus on those more closely integrated with its refinery operations.

Approachable and relaxed, even in the company of journalists, van der Veer's big break came in 2004 when he emerged as Shell group chief executive following the oil reserves debacle which, after much soul-searching and recriminations, eventually led to the resignation of chairman Sir Phillip Watts. Van der Veer was given the onerous task of rehabilitating Shell in the wake of the reserves scandal and has largely succeeded.

A keen golfer, van der Veer's value to Shell has been rewarded by the extension of his contract as group chief executive until June 2009, 20 months after he reaches his 60th birthday, the normal retirement age for front-line executives.

In 2007 Shell Chemicals made 33.36bn [euro] in sales and 1.49bn [euro] in net profit from continuing operations.

[ILLUSTRATION OMITTED]

Jean-Pierre Garnier

2 GSK 6.03m

Jean-Pierre Garnier, who retired as chief executive of GSK earlier this year, was rarely out of the headlines during his tenure as head of Europe's largest drugs company.

His career at GSK was inextricably interwoven with high profile controversies over a range of issues. They included serious teething troubles during the merger of SmithKline Beecham with Glaxo, the cost of drugs to developing countries, and enduring battles with generic drug producers over alleged breaches of patent rights.

Gamier also survived persistent criticism over the size of his remuneration package, attracting huge media interest when it was speculated that, with various performance bonuses, he stood to receive around 25m [euro] in one year.

Born in Le Mans, France, in 1947, Garnier, gained a science degree at the Louis Pasteur University, Strasbourg, earning a PhD in 1972 and an MBA at Stanford University in 1974. He joined Schering Plough in 1975, leaving in 1990 to join SmithKline Beecham where he rose to the rank of chief executive. Gamier was chosen to head the combined company after the merger with Glaxo and faced a series of tough battles and decisions over the integration of the two major drug firms.

In 2007 GSK made 28.7bn [euro] in sales and was Europe's number one chemicals/pharma firm in terms of net profit, at 6.71bn [euro].

[ILLUSTRATION OMITTED]

Jurgen Hambrecht

3 BASF 5.21m

As head of the world's largest chemical company since 2002, Jurgen Hambrecht has brought a scientist's cool, detached analysis to the often controversial world of big chemicals. His rise up the corporate ladder at BASF has been steady rather than spectacular, measured rather than meteoric.

Hambrecht was bom in 1946 at Reutlingen, Germany, and graduated in 1975 from the University of Tubingen in Germany with a doctorate in chemistry. He joined BASF's polymers laboratory business in 1976, moving to Lacke und Farben--which later became BASF Coatings-in 1985 as head of research and purchasing. Hambrecht was promoted to president of BASF's engineering plastics division in 1990, leaving in 1995 to take up a more senior managerial role as president of BASF's East Asia division.