Leading AstraZeneca investor defends CEO pay ahead of shareholder vote: FT

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来源: FiercePharma

Florida-based investment firm GQG Partners believes Pascal Soriot is underpaid considering the company's recent achievements, according to a report in the Financial Times.

While AstraZeneca CEO Pascal Soriot's proposed pay package has attracted criticism ahead of the company's annual meeting, a large investor has swooped in to support the helmsman.

In fact, GQG Partners' chairman and chief investment officer, Rajiv Jain, believes Soriot is "massively underpaid," according to the Financial Times.

Thursday, AZ shareholders will vote on a pay proposal that could deliver CEO Pascal Soriot upward of 18.7 million pounds sterling ($23.5 million) for this year’s performance. That would come from long-term performance incentive payments worth up to 850% of Soriot's 1.49 million pound base salary, the FT first reported.

The proposal prompted influential advisory firms Institutional Shareholder Services and Glass Lewis to recommend investors vote against the 2024 pay plan. But GQG sees things differently, according to this week's FT report.

As is, Soriot is “massively underpaid” after driving the company through an “impressive turnaround," Jain told the newspaper.

“I’d argue he should be paid more, not less,” Jain added. “We have no issue with a CEO receiving proper compensation when [they are] delivering results.”

The CEO overdelivered on his prior sales goal of bringing in more than $40 billion by 2023, reaching revenues of $44.35 billion in 2022. On the heels of that achievement, the company looks to launch at least 15 new meds by 2030.

To reap the maximum payout as laid out in Soriot’s proposed pay package, he’d have to hit multiple targets around new drug approvals, earnings per share and overall revenue.

Still, the compensation has already been highly contested by some influential shareholder advisors.

Institutional Shareholder Services (ISS) and Glass Lewis slammed the potential pay bump earlier this month, with ISS pointing out in a report that it stands to “further widen the variable pay gap” among AZ’s peers on the Financial Times Stock Exchange (FTSE).

Still, ISS noted that Soriot’s 2023 pay of 16.9 million pounds ($21.3 million) was “generally in line with performance” and didn’t raise any major concerns.

The two firms have levied similar arguments in the past, calling the company’s 2021 proposed CEO compensation increases “excessive.”

AZ said in its shareholder proposal that the changes are “necessary to increase the competitiveness” of the performance-based pay opportunity in the context of the global biopharma market.

“Given the size, complexity and global reach of AstraZeneca, the committee does not consider the constituents of the FTSE 100 to be an appropriate group against which to benchmark remuneration,” the company wrote.

Even before the proposed 2024 raise, Soriot has a record of out-earning European peers. In 2023, his payday topped those of the CEOs at Novartis, Roche, Novo Nordisk, Sanofi and GSK.

The company attributed the 2023 compensation award to AZ’s “very strong” commercial execution and “robust” manufacturing and supply operation, as well as his emphasis on innovation and dealmaking.

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