AstraZeneca could be heading for a pay storm at its upcoming AGM after the biggest grouping of public-sector pension funds were advised to vote down a remuneration plan that sees the drugmaker’s new chief executive pocket £6.5m after just three months’ work.
A week after the pharma firm announced nearly 4,000 job losses – including at least 700 in the UK – and a 35 per cent drop in annual profits, Astra announced its new boss, Pascal Soriot, pictured, was awarded a pay deal including a £991,000 “golden hello” to compensate him for his forfeited bonus from his previous employer, Roche, and £2m million in restricted shares and in ordinary shares, subject to performance. Former boss David Brennan, who quit following pressure from disappointed shareholders, also took home £4.9m for six months’ work.
Now the Local Authority Pension Fund Forum (LAPFF), which runs £115bn of assets, has recommended its members oppose Astra’s remuneration report at its AGM on 25 April.
“Companies should discontinue the practice of paying “golden hellos,” the LAPFF, which advises 57 public-sector pension funds around the UK, said.
“This policy was set out in LAPFF’s recent Expectations for Executive Pay document which was sent to all FTSE 350 companies in March. Since AstraZeneca has breached this policy, LAPFF has recommended that its members oppose the company’s remuneration report.”
The LAPFF chairman, Counsellor Kieran Quinn, added: “We don’t think executives should be paid for performance they have not actually achieved. That means we will challenge such awards whenever we see them, and will advise voting against the company’s remuneration report.”
Mr Soriot has axed thousands of jobs at Astra, including 2,300 of his salesforce and administrator posts which took the drugmaker’s job losses to more than 11,000 over the past year. Britain’s second-biggest pharmaceuticals firm employs 6,700 people in the UK.
The drugmaker is spending $2.3bn (£1.4bn) cutting 10 per cent of its staff over the next three years.