Daniel P. O’Day
About Daniel P. O’Day
Daniel P. O’Day is Chairman and Chief Executive Officer of Gilead Sciences, Inc., serving since March 2019; he is age 60 and not independent as a director . He holds a B.S. in Biology from Georgetown University and an MBA from Columbia University; his prior experience includes CEO of Roche Pharmaceuticals, membership on Roche’s Corporate Executive Committee, and board roles at Genentech, Flatiron Health, and Foundation Medicine . Under his tenure, cumulative total shareholder return (TSR) from a December 2019 base reached 174 by year-end 2024 versus peer group 118, while 2024 net product revenue was $28,610 million and non-GAAP operating income (including specified items) was $8,520 million; 2024 GAAP net income was $480 million, reflecting business dynamics and one-time items over the period .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Roche Pharmaceuticals | Chief Executive Officer | — | Led a global pharma business; senior operating leadership; member of Roche Corporate Executive Committee |
| Roche Pharma & Diagnostics (NA, EU, Asia) | Executive roles across divisions | — | International operating experience across major healthcare markets |
| Roche Corporate Executive Committee | Member | — | Top-level corporate governance and strategic oversight |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Pharmaceutical Research and Manufacturers of America (PhRMA) | Board Chair | Current | Industry policy leadership and stakeholder engagement |
| Genentech | Director (prior) | — | Biotech governance; oncology and biologics exposure |
| Flatiron Health | Director (prior) | — | Real-world data and oncology informatics exposure |
| Foundation Medicine | Director (prior) | — | Precision oncology diagnostics oversight |
| Galapagos NV | Director (in connection with Gilead partnership) | 2019–2024 | Alliance oversight supporting pipeline collaboration |
Fixed Compensation
2022–2024 CEO Compensation Summary
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Salary ($) | $1,691,154 | $1,740,962 | $1,771,201 |
| Non-Equity Incentive (Annual Bonus) ($) | $4,716,480 | $4,036,200 | $4,028,096 |
| Stock Awards (Grant-Date Fair Value) ($) | $10,603,901 | $11,865,090 | $12,426,816 |
| Option Awards (Grant-Date Fair Value) ($) | $3,750,014 | $3,749,966 | $4,125,011 |
| All Other Compensation ($) | $859,704 | $1,215,472 | $1,338,268 |
| Total Compensation ($) | $21,621,253 | $22,607,690 | $23,689,392 |
- 2024 base salary set at $1,775,000 (1.4% increase), with CEO annual incentive target at 150% of salary; maximum annual cash incentive payout capped at 200% of target .
Perquisites
- Company-mandated personal security, aircraft, and car/driver use for CEO (including personal travel), with CEO responsible for associated income taxes; other NEOs have limited use for security/efficiency .
Performance Compensation
Annual Incentive Plan – 2024 Corporate Performance Results
| Metric | Weighting | Target | Actual/Assessment | Performance Factor | Resulting Payout Contribution |
|---|---|---|---|---|---|
| Net Product Revenue (excl. Veklury, Livdelzi) | Part of 50% Financial bucket | Above 2023 actual (numeric target not disclosed) | Achieved above target; component factor 140% | 140% | Included in financial bucket outcome |
| Non-GAAP Operating Income (excl. items noted) | Part of 50% Financial bucket | Above 2023 actual (numeric target not disclosed) | Achieved above target; component factor 150% | 150% | Included in financial bucket outcome |
| Pipeline (new NMEs, key milestones) | Part of 50% Strategic bucket | Pre-set milestones (numeric targets not disclosed) | 12 NMEs introduced; multiple milestones achieved | 132% | 33% |
| Product (Biktarvy share, Trodelvy vials, CAR-T patient delivery) | Part of 50% Strategic bucket | Pre-set targets (numeric targets not disclosed) | Mixed: Biktarvy above target; Trodelvy and CAR-T below threshold | 75% | 11% |
| People (engagement & inclusion) | Part of 50% Strategic bucket | Pre-set goals (numeric targets not disclosed) | Engagement decreased; inclusion initiatives progressed | 65% | 7% |
| Overall Corporate Performance Factor | — | — | Veklury modifier applied at 1.00x; overall factor certified | 123% | 123% |
- CEO annual cash incentive is tied solely to corporate performance; 2024 payout was $4,028,096 (123% factor applied to target) .
- In 2025, financial metrics weighting increased to 60% (35% Net Product Revenue; 25% Adjusted non-GAAP Operating Income), and PSUs replaced annual revenue with multi-year adjusted non-GAAP EPS to better align with long-term value creation .
Long-Term Equity – Structure and 2024 Grants
- Mix: 50% Performance Shares (PSUs) based on 3-year relative TSR and annual revenue tranches; 25% stock options; 25% RSUs; options/RSUs vest over 4 years (25% at year 1, then quarterly), with PSUs performance-based and no payout below threshold; relative TSR capped at target if absolute TSR is negative .
| Award Type | Grant Date | Target/Units | Exercise Price | Grant-Date Fair Value |
|---|---|---|---|---|
| 2024 Performance Shares (two tranches: relative TSR and revenue) | 3/10/2024 | Target 76,854 shares (threshold 3,675; max 153,708) | — | $5,499,700 |
| 2022 Performance Shares (2024 subtranche certified in 2025) | 3/10/2024 (reported value for 2024 subtranche) | Target 21,581 (TSR/revenue subtranches as applicable) | — | $1,621,165 |
| 2023 Performance Shares (2024 subtranche) | 3/10/2024 (reported value for 2024 subtranche) | Target 15,723 (TSR/revenue subtranches as applicable) | — | $1,181,112 |
| 2024 Stock Options | 3/10/2024 | 279,130 options | $75.12 | $4,125,011 |
| 2024 RSUs | 3/10/2024 | 54,910 units | — | $4,124,839 |
- 2022 PSU outcomes certified: relative TSR at 84.80th percentile → 200% payout; net product revenue tranches earned 200.00%, 136.36%, and 176.42% → aggregate 170.93% payout on revenue tranche; O’Day earned 126,400 TSR shares and 110,666 revenue shares from his 2022 PSU grant .
- 2024 Outstanding Equity at 12/31/2024 (select lines for O’Day): exercisable options include 231,280 @ $66.01 (exp. 3/1/2029), 256,620 @ $72.34 (exp. 3/10/2030), 288,145 @ $63.91 (exp. 3/10/2031), 274,474 @ $57.92 (exp. 3/10/2032), 94,104 @ $79.50 (exp. 3/10/2033); unexercisable include 19,210 @ $63.91 (exp. 3/10/2031), 124,761 @ $57.92 (exp. 3/10/2032), 120,991 @ $79.50 (exp. 3/10/2033), 279,130 @ $75.12 (exp. 3/10/2034); RSUs and PSUs outstanding with disclosed market values (e.g., 126,400 TSR shares; multiple RSU tranches) .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Total Beneficial Ownership | 1,832,439 shares (as of Feb 28, 2025); less than 1% of outstanding (1,245,162,793 shares) |
| Ownership Guidelines | Executive stock ownership guidelines requiring multiples of salary; all NEOs in compliance as of Dec 31, 2024 |
| Hedging/Pledging | Hedging and pledging of Gilead stock prohibited for directors and employees |
| 2024 Vesting/Exercises | 240,702 shares vested (value realized $18,787,081); no option exercises reported for O’Day in 2024 |
Employment Terms
| Scenario | Cash Severance | Pro-Rata Bonus | COBRA | Outplacement | Equity Treatment | Notes |
|---|---|---|---|---|---|---|
| Involuntary Termination (without Cause) or Resignation for Good Reason | 2.0x base salary + 2.0x target annual incentive for O’Day | Pro-rata target annual incentive | Lump sum covering 24 months for O’Day | 12 months for O’Day | No acceleration; continued vesting/retirement rules per plan | Good Reason includes adverse changes to role, pay cuts, relocation beyond specified radius, or material breach (per O’Day offer letter) |
| Change in Control Termination (double-trigger) | 3.0x base salary + 3.0x target annual incentive for O’Day | Pro-rata target annual incentive | Lump sum covering 36 months for O’Day | 12 months for O’Day | 100% acceleration of options and RSUs; PSUs accelerate at target if CIC within first 12 months, else greater of target or actual-to-date | Double-trigger required; CIC protection period defined |
| Death/Disability | — | — | — | — | Acceleration based on actual performance for completed periods and target for open periods | — |
- 2024 estimated payouts for O’Day: $11.6 million for non-CIC involuntary termination; $80.6 million for CIC termination; $64.5 million for death/disability (includes equity acceleration valuation at $92.37 per share) .
- Clawbacks: Mandatory recoupment after restatement under Compensation Recovery Policy; discretionary recoupment for significant misconduct under Compensation Reconciliation and Recoupment Policy; public disclosure of recoupment actions under policy conditions .
- No excise tax gross-ups; no single-trigger CIC benefits; no fixed-term employment agreements .
Board Governance
- Board service: Chairman and CEO since 2019; not independent; no committee memberships .
- Lead Independent Director (Anthony Welters) oversees independent director sessions, attends committee meetings, and engages with shareholders; appointed in May 2024; chairs Compensation and Talent Committee; serves on Nominating and Corporate Governance Committee .
- Independent Chair proposal: Board recommends against mandating an independent chair, citing flexibility and strong lead independent director structure; historic shareholder votes (2013–2015, 2017–2022) opposed such proposals .
Compensation Committee Analysis
- Compensation and Talent Committee members: Anthony Welters (Chair), Jacqueline K. Barton, Kelly A. Kramer, Harish Manwani; all independent .
- Consultant: FW Cook retained by the Committee; determined independent; provided market and design advice; no other services to Gilead in 2024 .
- Management consultant: Compensia advised management on market data to support CEO recommendations for other NEOs; did not advise the Committee .
Compensation Peer Group (used for benchmarking)
| Peer Companies |
|---|
| AbbVie; Amgen; Biogen; Bristol Myers Squibb; Eli Lilly; Johnson & Johnson; Merck; Pfizer; Regeneron; Vertex |
- Committee does not target a specific percentile; takes holistic view incorporating internal equity and market practices .
Say-on-Pay & Shareholder Feedback
- 2024 say-on-pay support: 92% approval; investor engagement with holders of ~43% of outstanding shares; stockholders expressed general satisfaction with the program; 2025 program changes incorporate feedback focus on financial rigor and alignment .
Equity Award Vesting Schedules (mechanics)
- Options and RSUs: 25% vest at first anniversary of grant; remaining vest quarterly thereafter over four years; options have 10-year terms .
- PSUs: Two tranches—relative TSR measured over ~3 years; revenue (historically) in annual subtranches; beginning in 2025, PSUs use multi-year adjusted non-GAAP EPS .
Employment & Contracts
- At-will employment; severance provided via Severance Plan (amended/restated Aug 1, 2024) with double-trigger CIC; Good Reason as defined in Severance Plan and O’Day’s offer letter; non-compete/non-solicit terms not disclosed in proxy .
Risk Indicators & Red Flags
- Prohibitions: Hedging and pledging of Gilead stock prohibited; no option repricing without shareholder approval .
- Governance-friendly features: No single-trigger CIC; no excise tax gross-ups; robust clawbacks; capped incentive payouts; pre-established equity grant dates; risk review found compensation practices not reasonably likely to have material adverse effect .
Performance & Track Record
- 2024 portfolio and operations: Launch of Livdelzi for PBC; strategic partnership with LEO Pharma for STAT6; improved operational efficiency with cost reductions while driving near- and long-term growth .
- 2024 business highlights reflected in plan outcomes: pipeline expansion and milestone execution; Biktarvy share growth exceeded target; mixed product delivery in oncology/Cell Therapy; people metric below prior year engagement .
- Pay-versus-performance framework disclosed: compensation actually paid vs. TSR, peer TSR, net income, net product revenue across 2020–2024; CEO “compensation actually paid” varied materially with equity adjustments and stock performance .
Director Service and Dual-Role Implications
- O’Day is both CEO and Chairman; Board asserts unified leadership aids strategy execution; mitigated by strong Lead Independent Director, regular independent sessions, and annual board assessments; independent directors and shareholders have historically supported current structure .
Investment Implications
- Pay-for-performance alignment: Heavy weighting to PSUs with proven rigor (2022 TSR 200% at 84.80th percentile; revenue tranches earned robustly), and 2025 shift to multi-year EPS plus higher financial weighting further tightens linkage to value creation; this supports confidence in execution-driven upside but raises exposure to financial underperformance .
- Retention and overhang: Substantial unvested equity and scheduled vesting (e.g., 2024 RSUs 54,910; options 279,130) create ongoing retention hooks while periodic vesting can add supply; 2024 shows significant vesting value realized ($18.8M) and no option exercises, reducing immediate selling pressure signals .
- Governance risk mitigants: No hedging/pledging, strong clawbacks, double-trigger CIC, and no tax gross-ups reduce alignment risks; combined Chair/CEO risk is moderated by the Lead Independent Director’s robust remit and high independence across committees .
- Change-in-control economics: 3x salary+bonus cash multiple and full acceleration of time-based equity, with performance equity acceleration rules, imply meaningful CIC cost; investors should factor potential transaction dilution and executive incentives in M&A scenarios .
- Shareholder sentiment: 92% say-on-pay support and active engagement indicate low near-term governance pressure; compensation peer benchmarking against large-cap biopharma anchors competitiveness without percentile targeting that can inflate pay .