AstraZeneca runs into 'meaningful' investor revolt over pay
- Only 60.19% votes at AGM in favour of directors' new pay
- AstraZeneca says old pay did not reflect market position
- Eyes enabling succession planning with incentivised pay
May 11 (Reuters) - AstraZeneca (AZN.L) said a "meaningful proportion" of its shareholders voted against CEO Pascal Soriot's improved pay package on Tuesday, exposing a rift as the drugmaker deals with problems surrounding its COVID-19 vaccine.
At its annual investor meeting, 60.19% of votes cast were in favour, AstraZeneca said, adding that it would "engage and listen to ensure investors' concerns regarding the approach to executive remuneration are understood."
Large corporations typically win about 90% support for their pay in annual advisory votes, compensation consultants say, making narrow-win results such as AstraZeneca's effectively a call to review the programme and talk to shareholders.
Shares in London-listed AstraZeneca slipped 1.1% 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. read more
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
His new package puts him among the best paid European pharmaceutical bosses but still lags Johnson & Johnson (JNJ.N) CEO Alex Gorsky's near-$30 million pay plan which was approved by shareholders last month, also after some opposition.
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 Soriot's pay increase.
AstraZeneca recognised remuneration was "a sensitive matter" during the pandemic but noted its contributions to tackling the crisis and the scale and scope of what Soriot and chief financial officer Marc Dunoyer were being asked to deliver.
The company has pledged not to make any profit from its COVID-19 vaccine during the pandemic and also not from low income countries thereafter.
"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 bid 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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