Josh Schimmers Comp Justifiable?

Don’t mean to call him out specifically. I’m sure he’s great. This is more towards places like Cantor and Leerink (others do it too I’m sure) where they have these highly highly paid SS ER analyst (Josh Schimmer @ $8 million a year for 5 years).

Now that the biotech IPO market has dried up and many don’t see it ever reaching the heights of 2021, how is paying him $8 million a year even justifiable. You have to imagine with his team and additional expenses he’s costing the company $10 to $11 million I year. His banking counterparts have to be making $2 -$5 million each at the MD level.

Don’t see how this is sustainable at some of these small banks that live on biotech shit co’s. Someone correct me if I’m wrong. Is he really bringing in that much revenue from just his research? Additionally they hired Eric Schmidt who makes similar money.

 

Also to add to this - Sage Kelly back during his Jefferies days as head of HC IBD made $7 million according to various articles.



Seems very steep idk though. Curious if the business model. Seems like a lot of these places are trying to position themselves as “experts” in biotech/biopharma with highly trained scientist, but places like CVP get the massive m&a fees while the experts end up on follow on and IPO deals.

 

Do u know what biotech ER even is? Have u seen the raising done in Q1 2024? 5 of Schimmer’s companies can raise ~$200M each and he’ll make cantor more than his salary. I know guys at smaller shops like leerink/Cowen, and even smaller life sci capital. They all make a shit ton… 

 

Yea prospect, I’m a doctor who’s worked in biotech ER and IB. Now I work at a top SM biotech fund.


You don’t know how these deals work do you? Maybe find a job in the industry before you just blurt random numbers out. You have no idea how thin follow on and ipo margins are. Companies employ multiple banks on these deals to get max coverage (cantor is never lead) so divide the fees by 5/6. Then account for ECM and Coverage groups cut at each of the 5 banks.

 
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They are banking on the biotech IPO market picking back up. If they can get to 10% IPO market share in a normal issuance year he more than pays for himself. However the IPO market is still basically shut so they haven’t benefitted yet. Heard he’s on a 7x6 (7m for 6 years) making NBA money. I work in healthcare IB and this has been a topic of discussion in my group (whether Cantor can take market share purely through research, which is similar to what Evercore did, except Evercore has a real advisory arm whereas Cantor will only get looks at M&A if Sage Kelly has a relationship). They’ll look like fools if market doesn’t materialize in 2025

 

Sure that’s fair. Difference in the evercore model is they brought ISI (a top 5 research platform at the time). Cantor paid for some really good analyst, but they don’t have as robust of a research practice as ISI.


There are some very clear terrible analyst there. Tbf I think they are starting to creep into Jefferies level of biotech analyst. Bold strategy - hope it pays off for them.

 
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