Interactive Investor

AstraZeneca gets a bloody nose at AGM

At today's meeting, shareholders rebelled on boardroom pay and bonuses.

11th May 2021 16:35

Jemma Jackson from interactive investor

At today's meeting, shareholders rebelled on boardroom pay and bonuses.

Lee Wild, Head of Equity Strategy, interactive investor, says: “AstraZeneca (LSE:AZN) received a bloody nose at today’s AGM after 40% of shareholders voted against proposals to significantly improve both boardroom pay and bonuses. It’s understandable why. Only just emerging from a painful pandemic, throwing big money at your top team might look insensitive. And one can also sympathise with demands from protesters that Astra openly license its Covid-19 vaccine and share technology and expertise with the World Health Organisation.

“However, there are good reasons why Astra put these proposals to the vote.

“Too many chief executives are overpaid for underperformance. AstraZeneca’s Pascal Soriot is not one of them. AstraZeneca justifies the significant hike in Soriot’s already generous pay package with the well-worn excuse that you have to pay big bucks for quality CEOs. But in this case, they’re right. And it’s easy to see why they want to keep Soriot. Yes, the numbers are undeniably eye-watering, but Soriot and his team achieved massive global success with a life-saving Covid vaccine. That’s worth something. And Soriot’s track record at Astra is enviable. Since taking over almost nine years ago, he’s tripled the share price and left rival GlaxoSmithKline for dust. Now, Astra is a £100 billion company and about to get even bigger after this AGM rubber stamped the £28 billion acquisition of Alexion Pharmaceuticals.

“This pay and bonus upgrade is not the action of a lawless and unaccountable boardroom. Astra consulted 21 of its largest shareholders when devising these changes. Yes, it is easy to criticise the scale of director pay as excessive and out of touch, but shareholders know the value of Soriot to Astra. Losing him could cost them far more than a few million quid a year.”

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