For an industry that places such an emphasis on research and development, the report also reveals that only 43 per cent of the companies have a Scientific Officer or R&D director on their board as against 88 per cent finance directors.
The figures are expected to raise some eyebrows, especially for an industry that claims to thrive on scientific innovation. In addition, with the recent intense institutional shareholder scrutiny of top pharmaceutical executives pay, board members are under more pressure than ever to justify their earnings.
The study, UK Pharmaceutical Executive Pay - Insight into Director Remuneration, produced by Piribo Ltd, reported that average pay packages of CSOs is the among the lowest 36 per cent when compared to that paid to CEOs.
The finding leads to the obvious conclusion that a greater emphasis is placed upon finance over R&D. The decline in R&D productivity in the industry, measured by the falling number of new drugs launched on to the market in recent years despite an ever-growing spend on R&D, has been causing concern for some years. The question, raised by the report, asks if the UK pharmaceutical companies are driven more by the commercial viability of a project.
While the survey found that average total earnings of a pharmaceutical company executive director stood at £418,000 (€602,000) non-executives directors, total earnings totalled £42,000 (€60,000). However, the report found that the average bonus paid to an executive director on the board of a UK pharmaceutical company was an impressive £163,000 with the median value set at £55,000.
The bonus is the golden egg of many executives' pay packet as some can more than double their basic salary. Most bonuses are performance-orientated, dependant on preset targets of net income, turnover or even earnings per share before amortisation (EPSA).
UK pharmaceutical companies as a whole came in second in the list of the top 25 FTSE-100 index in terms of average director salary after oil and gas. There are a total of three pharmaceutical companies in the top 25 list: Reckitt Benckiser, GlaxoSmithKline and AstraZeneca (the "big 3").
The average executive pay package of these three companies is £2.8m, second after Oil and Gas at £3.2m. Financial Services with six has the maximum number of companies in the top 25 list followed by Media, Food and Beverages, and Pharmaceutical companies with three each.
The report highlights some other interesting findings including the role women play within the industry. Women were found to be under-represented on the board of UK pharmaceutical companies. Only six per cent of the boards are female with the highest paid woman earning a tenth of the highest paid male executive.
Out of the 342 members on the board of directors of UK pharmaceuticals companies only 21 (6 per cent) are female. Even more astounding is that, of the 21 women, only five are executive directors; the remaining 16 hold non-executive positions.
The highest paid female director Ornella Barra, executive-services director of alliance, Unichem Plc, with a total remuneration package of £383,000. This is in sharp contrast to the highest paid male director, Dr Jean-Pierre Garnier, CEO, GlaxoSmithKline Plc, who has a total package of £3.35m.
As expected the top European pharmaceutical company, GlaxoSmithKline, pays its board of directors more than any other UK pharmaceutical company, topping both executive and non-executive categories. The average pay package for a GlaxoSmithKline executive is £2.45m while that of a non-executive is £89,000.
Astrazeneca was ranked third, both in the executive and non-executive categories, paying its board of directors £1,3million on average while that of a non-executive is £66,000
According to >Piribo, the worst paying companies were the pure pharmaceutical research companies and biotechnology firms. Genemedix occupies the bottom spot in the executive category and Cyprotex in the non-executive directorcategory.