LONDON, April 15 (Reuters) - A group that represents local pension funds in Britain is recommending that its members vote against the pay package of AstraZeneca’s new chief executive.
Pascal Soriot, who took over at the drugmaker in October, received a package that included 4 million pounds in shares payable in up to eight years to compensate him for his forfeited bonus from his previous employer.
Urging its members to vote against the package next week, the Local Authority Pension Fund Forum (LAPFF) said on Monday it had calculated Soriot’s total pay for only three months of work to be 6.5 million pounds ($10 million).
AstraZeneca declined to comment directly, but said its remuneration policy promoted long-term growth in shareholder value.
LAPFF members own between 1 and 2 percent of AstraZeneca shares, a spokesperson for the forum said. In a statement ahead of AstraZeneca’s annual general meeting on April 25, the group said the award to Soriot was way above his predecessor‘s, on a pro rata basis.
“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,” LAPFF chairman Kieran Quinn said. The group represents pension funds with more than 115 billion pounds in assets.
Shareholder activist groups called for a number of remuneration packages to be voted down last year, as a rapid rise in boardroom pay appeared at odds with falling average incomes and tough economic conditions.
But the “Shareholder Spring” against executive pay has since lost momentum as investors seemed reluctant to vote against management.
A spokeswoman for AstraZeneca said: “We are committed to levels of remuneration that are sufficient to attract, retain and motivate senior employees of the requisite quality, while avoiding paying more than is necessary.”
In January, Soriot said sales and profits would both fall sharply in 2013 as the company continues to struggle with patent expirations for key drugs.