Novo Nordisk beat analyst expectations as it grew sales by 25% in 2024, spearheaded by continued growth for its GLP-1 weight-loss-aiding medications Ozempic and Wegovy. 

The group’s CEO, Lars Fruergaard Jørgensen, received a total remuneration package of DKK 57.1 million ($7.97 million) in 2024, of which 42% is not yet finally determined, and 45% is deferred. It was down $1.5 million on 2023, when Jorgensen received a total remuneration of DKK 68.2 million ($9.52 million).

The reasons for Jørgensen’s dip in pay aren’t completely clear but could be explained in part by the group’s stock-market wipeout last year and a disappointing diversity and inclusion report. 

Jørgensen’s pay

Unusually for the corporate world, Jørgensen’s base salary was increased in line with Novo Nordisk’s employees, rising at a modest, inflation-pegged 3.5% to DKK 18.4 million ($2.57 million) in 2024. 

A cash-based short-term incentive program (STIP) is comprised of four equally weighted target areas, spanning commercial and social goals in addition to a measure of individual performance, with the max payout an exec can receive being equal to their annual salary. Last year, Jørgensen nearly maxed out his STIP on the back of huge jumps in the company’s revenues and share price.  

Jørgensen’s STIP this year, however, came in at 69% of his annual salary, down from 96% in 2023; accordingly he missed out on $797,000 in pay. Jørgensen’s remuneration from his long-term, share-based incentive program fell 23% on his 2023 take home to $3.4 million for 2024.   

Part of the shortfall in Jørgensen’s STIP came from a miss in the company’s Purpose & Sustainability and Innovation & Therapeutic Focus subset, where it hit 12 out of 13 of its targets. The one area where the group fell short was diversity and inclusion.

Novo Nordisk’s remuneration committee made progress on its diversity and inclusion goals “but to a lesser extent than desired.”

The group’s diversity targets include achieving a gender balance across management, in addition to a minimum of 45% women and a minimum of 45% men in senior leadership positions by the end of 2025. The company says it also has location-specific targets to account for local demographic makeups.

A spokesperson for Novo Nordisk said the group increased its share of women in leadership positions by 0.7 percentage points to 42%. It remains committed to hitting its 2025 target this year and will “accelerate” its efforts in order to do so.  

As a result of missing out, Jørgensen surrendered around $108,000 in pay in 2024 that he would have gained otherwise, according to Fortune calculations. 

The subject of diversity, equity, and inclusion (DEI) has faced scrutiny in the last 12 months as the term became a target in an ongoing culture war in the West. 

President Donald Trump and Elon Musk have been vocal in their criticism of what they regard as anti-meritocratic DEI schemes. Trump signed an executive order on his first day in office banning DEI programs in the federal government. The 47th president blamed the hiring practice for the fatal plane crash in Washington last week that claimed 67 lives, without citing evidence.

The board’s assessment of Jørgensen’s performance

Jørgensen also faced a qualitative assessment on his personal performance as CEO, where he hit 50% of his maximum remuneration for his individual performance. Novo Nordisk’s CFO, Karsten Munk Knudsen, reached 67% of his max return based on his individual performance.

Summarizing his individual performance, Novo Nordisk’s remuneration committee was effusive in its praise for Jørgensen, without highlighting any shortcomings that would lead to him failing to receive 12.5% of his short-term bonus.

“Lars Fruergaard Jørgensen continued to serve as an effective and respected CEO of Novo Nordisk, leading based on the company’s values. He continued to set clear strategic direction, collaborated effectively with the Board, his team, and the broader organisation, and maintained a trusted dialogue with external stakeholders,” the committee wrote.

The rest of Jørgensen’s decline in pay could be explained by the company’s challenges with its valuation last year.

While Novo Nordisk increased sales and profits last year, the company’s share price took a battering in the second half of 2024. Shareholders faced a 10% loss in the value of their holdings in Novo Nordisk last year, driven primarily by a sharp decline following the release of disappointing trial results for its new weight loss drug CagriSema.  

The company said it took a “holistic assessment” to revise down the STIP group performance among its board of directors by 16% after citing the decline in shareholder value in 2024.