AstraZeneca chief rewarded with 5% pay rise after repelling Pfizer takeover bid

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Pascal Soriot, the chief executive of the drugmaker AstraZeneca, saw his pay rise by 5% to £3.5m in 2014 after he helped resist a takeover approach from its US rival Pfizer.

The Anglo-Swedish company said the award reflected him meeting or exceeding most of his performance targets, despite a fall in profits last year. Soriot could receive up to 380,000 AstraZeneca shares in 2016 and 2017, which currently have a value of about £16m, assuming he can achieve his most stringent targets. The Frenchman is also in line for another share award this autumn, which will be worth about £900,000.

The news on Soriot’s pay, contained within the group’s annual report, comes despite AstraZeneca suffering dissent from shareholders over its executive pay policy in recent years, including last year’s annual general meeting, where 40% of those voting failed to back its 2013 remuneration report. Soriot’s predecessor, David Brennan, was also ousted in the shareholder spring of 2012 after a row over his £9m pay deal, which had been awarded in the wake of a poor performance at Britain’s second-biggest drugmaker.

Last year, long-running efforts by Pfizer to acquire AstraZeneca were rejected on the grounds of price, although the deal had become politically charged after being portrayed as a story of an American corporate giant attempting to take over a venerable British business.

As part of AstraZeneca’s defence against being taken over, the British-based company set out a new growth plan targeting a 75% rise in annual revenue by 2023. AstraZeneca admitted that some of its shareholders had been pressing for those fresh targets to be expressly linked to Soriot’s future pay, but the company eventually rejected that approach.

The annual added: “There were some suggestions that we should include some of the 2023 metrics cited in response to Pfizer’s approaches. However, there was no consensus view as to how this should be structured and there was variation in shareholders’ individual preferences as to how the remuneration committee might respond.”

A spokeswoman for AstraZeneca said that the current pay policy was already “aligned” to achieving the 2023 targets, as it represented the “building blocks” of how the company would hit its new plan. The annual report also reiterated how the company’s pre-tax profits fell by 62% in 2014 to $1.2bn (£795m) on revenues up 1% at $26bn.

Powered by Guardian.co.ukThis article was written by Simon Goodley, for The Guardian on Tuesday 10th March 2015 17.57 Europe/London

guardian.co.uk © Guardian News and Media Limited 2010

 

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