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Investors Of AstraZeneca Angered Over ‘Obscene’ Bonus Hike For CEO


05/06/2021


Investors Of AstraZeneca Angered Over ‘Obscene’ Bonus Hike For CEO
There is increasing pressure on AstraZeneca over its decision to reward the company’s chief executive, Pascal Soriot, with a big increase in bonuses. A call on shareholders to oppose and vote against the policy had been given by three investor advisory groups.
 
The company plans to increase the maximum share bonus that can be awarded to Soriot, according to a long-term plan, to 650% of his £1.3m base salary from 550%. Concerns over this plan of the company have been raised by Pirc, Glass Lewis and Institutional Shareholder Services (ISS). AstraZeneca also wants to increase the maximum annual bonus payable to Soriot from 200% to 250% dependent on the company meeting performance targets.
 
Investors and shareholders were requested by the advisory groups to vote against the pay policy at the company’s next annual meeting.
 
The proposed increases were described as “obscene” by Neville White, the head of responsible investment policy and research at EdenTree Investment Management, which owns shares of the company and said that he would vote against the proposals. “It is obviously tricky, because Pascal is both a hero and an antihero at the moment,” he added.
 
This rise in pay and bonus comes at a time when AstraZeneca is facing increasing criticism about its coronavirus vaccine over supply shortages and a potential link to blood clots that has emerged in a rare number of incidents. The company has however said that it would be supplying the Covid-19 vaccine on a not-for-profit basis during the pandemic and added that it had made a loss in doing that during the first quarter of the current year.
 
After he managed to secure a turnaround of the company and rebuilding the drug portfolio of AstraZeneca, more than £15m in each of the last two years has been paid to Soriot. Over the years a number of revolts by shareholders over pay have been faced down by the company.
 
The company however has said that under the new policy, it will cut down the pension contributions of Soriot and other executives to the same level as that of the wider workforce of the company which is at 11% of the base pay.
 
“We link the remuneration of our executives to successful delivery of our strategy and shareholder returns. Since their appointment, our executive directors have driven a remarkable turnaround in the company’s performance. This has resulted in AstraZeneca delivering a total shareholder return of close to 300% over the last eight years, significantly ahead of our global pharmaceutical and FTSE 100 peers,” said a spokesperson of the company.
 
More than £20m from her 5.2% stake in a biotech firm she co-founded could be awarded to Prof Sarah Gilbert, the scientist who led the team that created the Oxford/AstraZeneca coronavirus vaccine. The company is also preparing to get listed in the United States.
 
The personal wealth of the chief executive of the Covid vaccine maker Moderna, Stéphane Bancel, is now at almost $5bn which is because of him owning an 8% stake in the company after the shares of the company surged by more than 500% within just the last one year.
 
(Source:www.theguardian.com)


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