AstraZeneca: an astronomical pay award divides the City
Sir Pascal Soriot may be a Frenchman, but the long-serving boss of AstraZeneca is “perhaps the closest Britain has to a blue-chip business hero”, said Patrick Hosking in The Times. So the sizeable shareholder revolt over his proposed pay package is significant. More than a third of voting investors (35.6%) opposed increasing Soriot’s pay from £16.9m to £18.5m at Astra’s annual meeting – defying the view of one of its largest shareholders, America’s GQG Partners, that he is “massively underpaid”. Although the rebellion failed, its size was a shot in the arm for “proxy” advisory agencies ISS and Glass Lewis, which had called for a loud “no”. This was “a big test” not just for the “tolerance of big pay rises”, but of “the power of the proxies” that guide institutional investors.
The £120m paid to Soriot over his “brilliantly successful” decade at AstraZeneca – now the FTSE’s second-largest company – is probably worth many multiples more to the UK economy, said Nils Pratley in The Guardian. Still, it’s “a helluva sum” for just one out of 90,000 employees. Astra argues that not paying Soriot and other key players “megabucks” risks an exodus of “top scientists” to rivals. Maybe. But the “big danger” is that it encourages “a wider attempt by UK plc to play the US card”, even when it’s not applicable. If the door is ajar, “why not give it a push”?
The £3.8m average salary of a FTSE 100 chief is already “more than 100 times the typical paycheque”, said Ben Marlow in The Daily Telegraph. Yet apologists “are banging the drum more forcefully than ever” – trotting out “the same tired arguments” for raising pay. It’s rubbish. “Show me one FTSE boss that has eloped because he or she was able to command a higher salary elsewhere.” Investors should call this out for what it is: “plain greed”.