The UK’s biggest investor has cautiously supported Sir Pascal Soriot’s controversial AstraZeneca pay deal, but warned that a successor shouldn’t expect the same treatment.
Legal & General voted in favor of plans to increase the pharma chief’s salary to £18.7million, but stated that their support was not unconditional.
L&G spokesperson said: “We’ll continue to review Mr Soriot’s package annually, and we won’t hesitate to vote against future remuneration reports if we feel his pay does not reflect company performance or changing market norms.”
Fund giant owns a nearly 1 per cent stake in AstraZeneca worth approximately £1,69 billion. Over a third (35%) of investors were against the plan to increase Soriot’s salary by £1.8million.
L&G warns that any new CEO should not expect to receive the same salary. We would like to stress that we don’t expect a new CEO to be paid the same as Mr Soriot if he or she does not have the same experience, including in terms of calibre and performance.
AstraZeneca, under Soriot’s leadership has grown from a laggard company that was at risk of being taken over by US drug giant Pfizer to the UK’s 2nd largest public company worth £171billion. Soriot made headlines when his company offered its Covid vaccination at cost price during the pandemic.
David Ricks, the chief executive of US pharmaceutical giant Eli Lilly – which is bigger than AstraZeneca – took home equivalent to £21 million in last year
Shareholders reacted with anger when the proposal to increase Soriot’s salary by £1.8m was announced. Glass Lewis and Institutional Shareholder Services, both proxy advisers, urged investors not to vote for the deal. The former called the compensation “excessive”. AstraZeneca received enough votes to pass the deal at its annual meeting held last week, but 35.5% of its shareholders voted in opposition.
In the next few months, other FTSE companies will face similar pay disputes. The London Stock Exchange Group wants investors to back a pay increase for David Schwimmer its chief executive. Meanwhile, the medical device maker Smith & Nephew is looking to raise its pay to match that of the US market.
GQG Partners is a major shareholder in AstraZeneca. They claimed that Soriot had been ” vastly underpaid”, given his performance with the company. David Ricks was the CEO of Eli Lilly last year. Eli Lilly is a much bigger company than AstraZeneca. He earned $26.6 million. Lars Fruergaard Jorgensen was the chief executive of Novo Nordisk – Europe’s biggest pharmaceutical company – and he received just over £8 million.