AstraZeneca moves to placate shareholders over chief executive’s £14m pay by promising to freeze his bonus package for three years
AstraZeneca has moved to placate shareholders over its chief executive’s £14million pay by promising to freeze his bonus package for three years.
The pharmaceutical giant suffered a shareholder rebellion last year over the rewards lavished on its boss, Pascal Soriot. Even though AstraZeneca had under his leadership played a key role in the global Covid vaccine effort, investors were angry the firm had significantly increased his potential bonus for the second year in a row.
Outgoing chairman Leif Johansson said that, since last May’s annual meeting, he had met 16 major investors representing 40 per cent of the share register.
Taking the lead: : AstraZeneca, under Pascal Soriot’s leadership, played a key role in the global Covid vaccine effort
He admitted the decision to ask shareholders to vote on a new pay policy for two consecutive years was an ‘unusual step’. These policies, which set share and bonus awards to executives, are typically voted on every three to five years. Johansson last year promised investors the company would not present a new pay policy for three years. Last week he confirmed in its annual report that the 2021 policy would remain in place until 2024 ‘in response to concerns raised by some shareholders’.
Despite the controversy, the Frenchman’s pay lagged his peers in the global pharma industry. His pay last year was also below his total £15.9million for 2020.
In total, he owns stock in the business worth £26million.
The only change to Soriot’s salary this year will be a rise of 3 per cent, in line with the rest of its workforce, taking his pay to £1.37million. His maximum bonus will be 250 per cent of his salary and long-term incentives will be 650 per cent of base pay until 2024.
The company’s annual report lastweek praised him for continuing ‘to work tirelessly with multiple Government policy makers, ministers of health and heads of state around the world to secure production and delivery of AstraZeneca’s Covid-19 vaccine’.
Soriot took charge in 2012 and saw off a £70billion hostile bid from US firm Pfizer two years later. Shareholder returns have risen 345 per cent under his leadership.
Astra pledged to produce the Covid jab at cost price during the pandemic. It has now signed new deals to deliver it at a ‘modest’ profit.
Andrew Speke of the High Pay Centre think-tank said: ‘Credit to the shareholders who challenged the scale of remuneration paid to Pascal Soriot, but his package is still more than 400 times that of the average UK worker.
‘Greater restraint needs to be seen in future years if AstraZeneca really wants to show it takes fair and proportionate reward seriously.’