Hologic CEO's $42M pay leads Central Mass. executives
Photo | Courtesy of Hologic
Stephen MacMillan, president & CEO of Hologic, Inc., in Marlborough
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Steve MacMillan took home $42 million last year as CEO of Marlborough medical equipment maker Hologic.
It might go without saying that his eye-popping payday led the way for Central Massachusetts executives.
MacMillan’s fiscal 2018 salary – heavily boosted by roughly $39 million in stock awards and options – was the highlight of the latest reporting year for executives in Central Massachusetts in which overall compensation rose by 15 percent, according to a review by the Worcester Business Journal of more than 200 leaders of corporations, colleges, hospitals and nonprofits.
In all, pay rose by an average of $147,000 to just over $1.1 million.
The year-to-year increase – reflected in entities’ most recent annual reporting period to either the Securities and Exchange Commission or the Internal Revenue Services – was even higher for executives at the 19 public companies in Central Massachusetts. In those cases, more than 60 executives saw their pay rise by 24 percent, to more than $3.2 million.
That increase of $631,000 for public-company executives was buoyed by MacMillan’s pay, which nearly quadrupled what he took home the previous year. Without MacMillan’s salary factored in, other Central Massachusetts public-company executives brought in an additional 2 percent, or $50,000.
That relatively low increase for the rest of the regions’ executives doesn’t appear to signal companies are reining in their pay. Instead, the stock market’s uneven performance last year meant that stock options – MacMillan aside – often weren’t quite as high.
Ernie Herrman, president and CEO of Marlborough retail parent TJX Cos., took home $16.9 million, a drop of $1.7 million from the previous year, as TJX stock stood largely flat in 2017. The leaders of two other companies that have not done as well both saw their pay fall: SeaChange CEO Edward Terino’s compensation fell by 47 percent to $1.3 million, and ReWalk CEO Larry Jasinski’s dropped 31 percent to $770,645.
Stock options and awards still made up the bulk of most of the highest-earners’ compensation.
For Boston Scientific President and CEO Michael Mahoney, stock options and awards made up more than $9 million of his $13 million in earnings, for example.
Justifying a $42 million salary
MacMillan was in line for a huge payday since late 2017, when the Hologic board unanimously voted to give him a $30-million special retention equity grant as it worried that other companies were looking to lure him away.
The board’s compensation committee addressed the decision in its annual proxy Jan. 18, which disclosed the $42 million compensation.
“While this grant is significant and certainly puts Mr. MacMillan’s total compensation for fiscal 2018 well in excess of peer compensation,” the report said, “the independent members of the Board of Directors determined, after careful consideration and debate, that it was in the best interests of the company and its stockholders to retain Mr. MacMillan – and that this equity grant, which is 100-percent performance-based, was the best way to do so. This decision was not made lightly.”
The board said it doesn’t envision making another such payment again.
MacMillan's pay raises a debate about how much CEOs should be compensated for their company's success, said Cary LeBlanc, a management and marketing professor at Assumption College who has more than 25 years of experience in corporate human relations roles.
"I'm concerned that we're valuing a CEO's leadership in such a way that I worry diminishes the work of others," LeBlanc said. "How much of that is really on the shoulders of people who were also responsible for that success and working very hard?"
LeBlanc said he asks the question rhetorically in his courses but can't provide an answer. Still, he added, the question seems appropriate to ask what corporate compensation committees are thinking with such eyebrow-raising compensations that could overstate how important a particular CEO's role is.
"It is a bit out of hand," he said.
MacMillan, 55, may not be one of the region’s most high-profile executives today, though he did have a scandalous exit following a seven-year stint leading Stryker, which had offices in Hopkinton. While there, MacMillan made news in the business world when he sought the board’s permission to date a former flight attendant for the company's corporate jets while his wife pursued a divorce, The Wall Street Journal reported in 2012.
Stryker said MacMillan didn’t violate any company policy or code of conduct, but MacMillan left the company shortly thereafter. The Journal reported some board members were bothered by how MacMillan handled the relationship and he was forced out.
He joined Hologic in 2013 when the company said it had $4 billion in debt with declining sales and earnings. In MacMillan’s time leading Hologic, the company has seen revenue climb by 28 percent, hitting $3.2 billion last year. MacMillan also serves on the board of directors for Boston Scientific, where he took in another $282,000 last year.
MacMillan could likely be the highest paid of any public-company executive in Massachusetts. Among the CEOs for General Electric, Raytheon, Thermo Fisher, State Street Corp. and others among the state’s largest public companies, none made more than the $29.3 million that GE’s Jeff Immelt made in his last year leading the company before retiring.
A New York Times listing last year of the highest-paid CEOs didn’t include MacMillan, but his salary this year would have landed 14th on the list.
Highest-paid college and healthcare leaders
MacMillan’s 2018 compensation was attention-grabbing enough to hide the fact that many of the region’s other highest-earning executives didn’t make much more last year, or even may have seen their compensation drop.
At TJX, Herrman and Executive Chairman Carol Meyrowitz saw their pay decrease by more than $1 million. Herrman still brought home $16.9 million, and Meyrowitz $13.4 million. (Of the region’s 10 highest paid executives, Meyrowitz is the only woman.)
In fact, half of the top 10 highest-paid executives lost some pay compared to the previous year. Three of them work for TJX.
Outside the corporate world, top officials at Central Massachusetts colleges saw their pay rise by 7 percent, carried in part by compensation for Worcester Polytechnic Institute President Laurie Leshin rising 25 percent to $994,957. UMass Medical School Chancellor Michael Collins remained the region’s highest-paid executive in higher education with $1,069,752 in compensation.
In health care, UMass Memorial Health Care President and CEO Eric Dickson made $1.8 million and Reliant Medical Group President and CEO Tarek Elsawy took home $953,340.
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