AstraZeneca has suffered a shareholder rebellion against an £18.7m pay packet for the pharmaceutical company’s chief executive, Pascal Soriot, with more than a third of votes cast opposing the deal.
At its annual meeting in London 35.5% rejected the company’s remuneration policy, rising to 38.5% including withheld votes. In addition 34.7% voted against amendments to the company’s performance share plan.
However, the company still received enough support to push the package through. The proposals will increase Soriot’s pay by £1.8m, taking his annual package including cash and long-term share bonuses to £18.7m. Soriot has received nearly £120m in the decade since taking over at the drugmaker.
The deal had a mixed reception, with the High Pay Centre thinktank saying the proposed package, which is 1,000 times more than the minimum wage, was “excessive” and could not be justified.
Others have backed the deal. GQG Partners, one of the company’s main shareholders, told the Financial Times Soriot was “massively underpaid” and deserved the rise due to AstraZeneca’s strong performance.
Last year, AstraZeneca made better-than-expected revenues of $45.8bn (£36bn), driven by the lung cancer drug Tagrisso and other oncology treatments, which made up more than a third of sales. Profit before tax jumped to $6.9bn from $2.5bn.
Ahead of the annual meeting the company said it intended to increase the annual dividend for 2024 by 7%, or $0.20 to $3.10 a share, reflecting its confidence in its performance and cash generation. Its shares closed more than 2% higher at £109.62 on the news.
The company’s chair, Michel Demaré, said: “The board is delighted to announce a 7% increase to the dividend, taking it to $3.10 a share. This uplift is in line with our progressive dividend policy, which remains unchanged, and reflects the continuing strength of AstraZeneca’s investment proposition for shareholders.”
The company said the increase took into account other capital allocation policies.
Meanwhile, shareholders of the medical equipment company Smith & Nephew are being urged to vote against a proposed pay rise for its chief executive, which could lead to Deepak Nath’s pay increasing by almost 30%.
Under the proposals, which were first reported in the Financial Times, Texas-based Nath’s pay will hit $11.8m next year if all targets are met, which would be a 29% increase from his current maximum pay packet of $9.2m.
That led Institutional Shareholder Services (ISS), a proxy adviser, to call on shareholders to reject the “excessive” pay plan at the company’s annual meeting next month.
ISS said it had “material concerns” about the size of the increase and the structure of the new policy, which would hand US-based executives more shares in the company irrespective of their performance.
However, Glass Lewis, another proxy adviser, supported the remuneration deal, saying there was a “compelling rationale” for increasing pay for its US-based leaders.
