AstraZeneca investors narrowly approved pay package proposals for its chief executive, Pascal Soriot, after nearly 40%voted against the policy, which could hand him payand perks of up to £17.8m for 2021.
At the company’s annual meeting in Cambridge, the Anglo-Swedish drugmaker managed to pass its remuneration policy, which required support from shareholders holding more than 50% of the firm’s stock, but suffered a sizeable rebellion, as investors owning 39.8% of the shares opposed it. The rest voted in support of the policy.
A host of shareholder advisory groups and fund managers had opposed the pay proposals. They could take Soriot’s pay to nearly £104m since he took over in 2012 and completely overhauled the company’s drug portfolio. Working with Oxford University, AstraZeneca was one of the first to develop a Covid-19 vaccine, which it is selling at cost price.
Under the company’s long-term plan, Soriot’s share bonus is set to rise from 550% of his £1.3m base salary to 650%. AZ also intends to raise Soriot’s maximum annual bonus to 250% of salary from 200%, depending on performance targets being hit.
The US investor advisory groups ISS and Glass Lewis, as well as their UK counterpart Pirc, had recommended investors vote against the pay policy, while the UK’s Investment Association issued an “amber top” warning, the second most severe in a traffic light system of alerts about corporate governance.
AZ’s remuneration committee said it had undertaken an in-depth consultation process with its largest shareholders, and recognised that “a meaningful proportion of shareholders” were not able to support the policy.
“The committee will continue to engage and listen to ensure investors’ concerns regarding the approach to executive remuneration are understood,” it said.
“The committee acknowledges that it is unusual to seek approval for a revised remuneration policy at two consecutive AGMs (annual general meetings) and that remuneration is a sensitive matter during this pandemic period.”
It stressed that AZ had not applied for any government funded wage subsidies or furlough arrangements around the world. “Additionally, the company has been a world-leading actor in the pandemic response through its non-profit vaccine initiative and other humanitarian actions.”
The company has pledged to provide its vaccine on a not-for-profit basis for the duration of the current pandemic. By contrast, US rivals Pfizer and Moderna have forecast collective revenues of $45bn (£32bn) from their Covid vaccines this year.