Epoch 17: Biotech Salary Survey

Geography, Gender, Identity

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Hello Avatar! Welcome back for another week of biotech analysis. This week we discuss everyone’s favorable topic, salary.  Are you getting paid what you are worth? That is a question we all ask ourselves. The average employee does not really know how to go about evaluating this.  Maybe you consult with friends or colleagues and have some sense of where the market is.  But to be honest, unless you are plugged into the daily movements of the labor market, in your industry, and in your geography you really are not going to have an accurate read.  Lucky for you, if you are reading this you subscribe to BowtiedBiotech and we can assure you we ARE plugged into this.   We sit on a number of compensation committees (some at your favorite biotech company).  Stick with us below and we will take you through all the numbers.

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THE BASICS ON SALARY SETTING

Before getting into the actual numbers let’s begin with some ground work on who determines your salary.  Do you think your boss determines your salary?  WRONG.  Your salary is paid on what you are worth, if you fail to test the market by fielding offers you will forever be destined to sit around the middle of the salary band for your position.

The way salary setting works is that it starts with the board of directors (BOD).  The BOD will often have a sub-committee dedicated to this topic. In the US it is often referred to as the compensation committee.  In Europe it can be called the remuneration committee. While the focus is typically on the C-Suite it flows downhill from there.

There are two ways the Comp Committee will look to survey salary.  The first is by word of mouth.  Often the BOD is heavily populated with investors.  As active investors we often sit on multiple BODs. Typically each director has 5-10 data points on salary.  As you can imagine we talk and share information.  In a hot job market (like we had 2020-21) you bet your life we quickly realized that and were talking about adjusting salaries upward to ensure retention, particularly for key personnel.

The second way salary is set is via benchmark.  Many of the recruiting firms will share their data on salary for their placements over the past year.  Since we often work with recruiters and have relationships with all the big firms these reports are typically available upon request.  Radford/Aon is one example of where many draw salary survey results from.  The salaries are often sorted by title and broken out into 25/50/75 percentile.  It can become quite detailed and include information on base, bonus, equity, etc.

Now, you might be thinking what about me? I am not in the C-suite.  Once the top tier of the organization's salary is set a mature company will work with HR consultants to set salary bands for each level of the organization.  It would be highly inefficient and inconsistent if this was not the case.  However, when it comes time for annual salary increases and bonuses, depending on the size of the organization the BOD may have full visibility into all employees management recommended compensation increase proposals.

Note: if your organization is >100 people it is likely not the case that the BOD will review all compensation, but will certainly approve high level guidance on raises, equity, etc.

BIOTECH SALARY SURVEY