Soriot facing unjust vote
ASTRAZENECA and the Oxford vaccine may be the toast of great swathes of the United Kingdom, but the city’s governance mavens take a different view. the fact that chief executive Pascal soriot grasped the nettle and developed a cost price, easily stored and transported vaccine for the whole world has done it no good with advisory services, which monitor pay in the boardroom, or the precious UK long funds.
Both groups are proving unwilling to look through the company’s pay report in the light of the gift to humanity or advances in the group’s share price.
When the votes on rewards and in particular soriot’s potential £18m pay in the current year are totted up at today’s annual general meeting a substantial minority, perhaps 40pc to 50pc, will have cast their vote against.
there won’t be as big a revolt as that at rio tinto last week. But given the contrasting contributions of the shamed mining company executives and soriot to the world it seems an unnecessary punishment.
the only saving grace is that the French chief executive will be unanimously reelected. What appears to have caused most dissonance at the Investment association (Ia), whose members manage some £8.5 trillion of assets, is that the remuneration panel moved the goalposts two years in a row. that triggered £15.4m in 2020 and even more this time with the prospective bonus rising from 550pc of salary to 650pc. aZ chairman Leif Johansson, who is seeking an extra year in office, backed the uplift for soriot knowing he had been dissatisfied with his salary package for some time. He wanted to make sure that soriot remains in place and his achievements are recognised.
soriot’s performance and that of aZ shares can be contrasted with that at the UK’s other big pharma group Glaxosmithkline where the chief executive emma Walmsley is under siege from vulture activists elliott Management over a slipping valuation. among those thought to have voted against soriot’s pay is aviva, which was at the head of the queue when it came to dissing the recent float of Deliveroo.
soriot made errors in the pandemic by not addressing european and Us concerns about the vaccine and delivery schedules urgently enough. But his contribution to Britain has been immeasurable. He led the battle against a government- encouraged takeover by Pfizer in 2014 at £55-per-share. the shares are now trading at £77. He has built an open access £1bn pharmaceutical research centre in cambridge and aZ has been at the forefront in development of cancer fighting immunology drugs.
the Ia and advisory groups such as Glass Lewis feel that they cannot give anyone a free pass on pay for fear that greedy executives will come flooding through the gates.
By being so inflexible on soriot’s pay they are failing to acknowledge the public good created by aZ which overwhelms all else. should the result of the vote rile soriot and lead him to reconsider his future, it will not just be aZ which pays the price but Britain.
that is barmy.
Door stop
THE end of high interest, doorstep lending might seem a decent development. In recent times Provident Financial has not covered itself in glory.
the switch from local agents familiar to hard-pressed customers, many of them women, to direct employees and a more digital approach left it open to challenge by claims management firms.
It made Provident an easy target for complainants who found a willing ally in the Financial Ombudsman service. the decision (as foreshadowed here) to cut and run isn’t good for anyone.
It opens the door to more abusive lenders, less regulated, less transparent and often violent. From now on, the Provvy intends to focus on its banking/credit card operation Vanquis which offers services to borrowers without credit ratings.
that leaves those at the very bottom of the socio-economic ladder exposed. that is not a welcome outcome.
La-la Land
THE grand dame of UK property Land securities is not giving up on central London.
It has decided to press ahead with the second stage of its nova development in the city’s Victoria area, adding a 160,000 sq ft of new office space. It includes public amenities such as 15 ‘fantastic’ terraces and a community lounge. We shouldn’t read the last rites for big cities just yet.