Astrazeneca is too big and complex to base its chief executive’s pay packet on the rest of the FTSE index, according to the chair of its remuneration committee.
Writing in the pharmaceutical giant’s annual report, chair Sheri McCoy said “UK-listed FTSE companies are not the right peer group for us to use” given the group’s “size, complexity and global footprint”.
The comments come as Astrazeneca handed a pay packet worth £14.7m to chief executive Pascal Soriot for its latest financial year.
The figure is down from the £17.3m he was given in the prior year mostly because of the long-term incentive element.
At last year’s annual general meeting, Astrazeneca faced strong opposition from major shareholders over proposed changes to its remuneration policy.
The reforms were pushed through at the AGM but a significant number of investors voted against the changes.
Since then, McCoy has been on a charm offensive to win over the support of major shareholders and pledged to be more communicative in future of the reasons behind remuneration policies.
Revenue surges at Astrazeneca
In February, City AM reported that Astrazeneca’s revenue jumped 21 per cent last year despite growing troubles over its presence in China.
The pharmaceutical giant recorded $54bn (£43.3bn) in revenue for the year, a jump of 21 per cent on 2023’s levels.
In its full-year results, the largest FTSE 100 firm revealed that revenue in Europe had skyrocketed 37 per cent. In the US, revenue expanded 28 per cent.
‘FTSE companies are not the right peer group’
In the company’s annual report, remuneration committee chair Sheri McCoy said: “Astrazeneca’s largest investors remain fully supportive of the leadership team, our pay for performance philosophy and of our Ambition 2030.
“Our major shareholders understand the rationale for the policy changes, the global nature of the business and the need to be able to compete for talent globally, and recognise that the committee believes that UK-listed FTSE companies are not the right peer group for us to use, given Astrazeneca’s size, complexity and global footprint relative to FTSE peers, and the influence of pay practice within the global pharmaceutical industry.”
The annual report comes after Astrazeneca cancelled a planned £450m investment in a vaccine manufacturing plant on Merseyside, saying Labour have failed to match the previous government’s offer of funding.
The pharmaceutical giant scraped plans to expand its existing facility in Speke, as announced by then-Chancellor Jeremy Hunt at last year’s March Budget.