Astrazeneca rocked by pay revolt
aSTRaZeNeca has become the latest blue-chip giant to suffer an investor uprising against pay as a ‘shareholder spring’ rages in the city.
at the drug maker’s annual general meeting, almost 40pc of votes were cast against an £18m package handed to boss pascal Soriot.
although the pay plans passed, the results brought astra close to defeat.
it was the latest rebuke to a major firm following similar revolts at Rio Tinto, pearson, Bae Systems and Glencore, prompting talk that a repeat of 2012’s shareholder spring is under way.
Soriot, who received £15.4m last year, is one of Britain’s top- earning executives but claims he is underpaid compared to the bosses of other big drug makers.
The Frenchman, 61, has won plaudits for leading astra through a stunning turnaround since taking over in 2012, as well as for rolling out its covid-19 vaccine at no profit. But the latest pay rise has divided investors, with some warning it could tarnish the company’s image and others only going along with it reluctantly.
aviva investors and Standard Life aberdeen were among those who opposed it, while Jupiter asset Management pledged its support.
all three shareholder adviser groups – iSS, Glass Lewis and pirc – urged against the proposals and the investment association issued an ‘amber-top warning’, indicating concern.
Under the changes agreed, the maximum amount Soriot can receive in bonuses has been
‘Soriot’s track record is enviable’
increased by £2.3m to £11.9m, on top of his £ 1.3m salary and £267,000 worth of benefits and pension contributions.
his total package can also rise by a further £4.3m if astra’s shares rise 50pc, taking his earnings as high as £17.8m.
it marks the second year in a row that his pay has been hiked.
astra said Soriot was worth the cash, pointing to the ‘remarkable turnaround’ since he took over, with supporters agreeing the changes to prevent him from being poached.
Soriot had grumbled that he was ‘the lowest-paid ceO in the whole industry’ after bosses of rival biotech firms earned more, such as Regeneron boss Len Schleifer who bagged nearly £96m last year.
Richard Buxton, of Jupiter asset Management, said this was why his firm backed astra, saying: ‘if the board feels there is a real risk of losing pascal... and so they’ve got to up the ante, then i’m prepared to trust the board.’
Soriot’s pay has been a controversial in the past as well, with shareholders revolting against his packages at the company’s 2014, 2017 and 2018 annual general meetings.
Lee Wild, head of equity strategy at interactive investor, said: ‘The numbers are undeniably eye-watering, but Soriot and his team achieved massive global success. That’s worth something. and Soriot’s track record at astra is enviable.’ he pointed to astra becoming a £100bn company last year – overtaking arch-rival Glaxosmithkline – and its takeover of rare disease specialist alexion pharmaceuticals for £28bn.
Wild added: ‘Losing him could cost them far more than a few million quid a year.’
astra shares fell 1.1pc, or 86p, to 7632p yesterday.