Two influential shareholder advisers to British-Swedish multinational AstraZeneca described the company’s plan to pay chief executive Pascal Soriot up to £18.7 million as “excessive” and said his remuneration was already competitive compared to international peers.
The drugmaker last month submitted its pay proposal for the CEO, who would need to meet a series of targets, including new drug approvals, earnings per share and total sales, to get the maximum amount for his performance this year.
Since taking over in 2012, Pascal Soriot has transformed AstraZeneca into the second-largest company on the FTSE 100 index behind Shell.
The 64-year-old earned £16.9m last year after hitting most long-term targets, making him one of the best-paid CEOs on the blue-chip index.
When explaining the reason for its potential compensation hike in its annual report, AstraZeneca said the increase was “material if viewed in the UK context” but that “changes are necessary to increase competitiveness” against its US and European counterparts.
Glass Lewis and ISS, which make recommendations to shareholders on how to vote at annual meetings and on corporate governance matters, disputed the claim and urged investors to vote against the plan at AstraZeneca’s annual general meeting on April 11, according to a report in the Financial Times.
While ISS acknowledged that AstraZeneca has a “global reach, operates in a high-paying sector, with a well-respected CEO at the helm,” it said it remained concerned about “the scale of the increase.” She added in a report that Soryu’s bonuses were already “competitive with her European peers.”
In its assessment, Glass Lewis noted “an absence of convincing evidence that the CEO has been underpaid compared to his peers in recent years.”
Sorio already earns more than the heads of major European pharmaceutical companies. Lars Frørgaard Jørgensen, chief executive of Novo Nordisk, Europe’s largest pharmaceutical group by market value, earned 68 million Danish kroner (£7.8 million) last year.
The intervention by the world’s largest proxy advisers comes as CEO pay has become a flashpoint in the debate over how to convince more companies to list in London.
Julia Huggett, head of the London Stock Exchange, said last year that UK executives should receive higher pay as the stock exchange struggles to attract more companies.
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