AstraZeneca (AZN.L) shareholders narrowly approved Chief Executive Pascal Soriot’s proposed pay package on Tuesday, after investor advisory groups said its rewards were excessive.
At its annual investor meeting, 60.19% of votes cast were in favour of approving the new remuneration policy, AstraZeneca said, acknowledging that a “meaningful proportion” were against.
Shares in London-listed AstraZeneca were down 1.3% to 7,615 pence at 1404 GMT after the vote, which comes as the drugmaker faces a second European Union legal move over delayed deliveries of its COVID-19 vaccine and concerns over rare blood clots.
The new pay policy takes Soriot’s maximum annual bonus for 2021 to 2.5 times his base salary, up from twice his salary, and makes him eligible for long-term share awards worth as much as 6.5 times his salary, up from 5.5 times. read more
“The board’s approach to reviewing the policy … did not accurately reflect AstraZeneca’s improved position in the European market,” the company said.
Soriot, who has been in charge of AstraZeneca since 2012, told The Times in a 2018 interview that he found it annoying to be the lowest-paid CEO in the industry. His package has since jumped almost 50% from its level in 2017.
Soriot’s total pay package for 2020 of 15.4 million pounds ($21.7 million) was roughly unchanged from 2019. Most of that comprised bonuses and long-term share awards on top of a base salary of 1.3 million pounds.
Shareholder advisory groups ISS, Glass Lewis and PIRC all recommended that investors vote against the pay increase.
Soriot’s salary last year compares to J&J CEO Alex Gorsky’s near-$30 million pay plan which was approved by shareholders last month, also after some opposition.
AstraZeneca said it recognised remuneration was “a sensitive matter” during the pandemic but pointed to not seeking government aid, its contributions to tackling the crisis and the scale and scope of what Soriot and the company’s chief financial officer (CFO) were being asked to deliver.
“The Board considered it appropriate to take another step to address their market pay positioning in order to retain and incentivise them; and enable succession planning,” it said.
Soriot has driven a change in AstraZeneca’s fortunes by betting on newer products while thwarting a 2014 takeover approach by Pfizer (PFE.N). AstraZeneca’s oncology drug business, in particular, is thriving as its not-for-profit pandemic vaccine is distributed.
In a separate meeting, AstraZeneca shareholders approved its planned $39 billion takeover of U.S. group Alexion (ALXN.O).
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