AstraZeneca faces the prospect of a shareholder revolt over pay after advisory groups told investors to reject its remuneration plan for the second year running.
The pharmaceutical giant is set to pay chief executive Pascal Soriot £9.4 million, and shareholders have been advised to vote against the firm’s remuneration report at the annual general meeting (AGM) on Friday.
Shareholders also rebelled against AstraZeneca’s pay plans at its AGM last year, when Mr Soriot was in line to receive £14.3 million. Almost 40% of shareholder votes came out against the remuneration report.
Institutional Shareholder Services (ISS), the advisory group, said there has been an attempt to address some investors’ concerns since last year, but that there were still issues around how targets were disclosed.
This year should see the company return to growth, but not until the second half. Crestor, the company’s flagship super-statin, is coming off-patent and the sharp drop in sales here is masking growth in newly developed and launched productsSteve Clayton, funds manager at Hargreaves Lansdown
Pensions and Investment Research Consultants have also advised shareholders to reject AstraZeneca’s pay report.
AstraZeneca’s shares fell at the open after it revealed first-quarter profits had slumped 36% year-on-year to 374 million US dollars, saying it was hit by falling margins, administrative costs and increasing competition.
Revenues came in at 5.17 billion US dollars, missing consensus estimates of 5.18 billion US dollars.
Andy Smith, analyst at Edison Investment Research, said Mr Soriot’s retirement “may not be many more earnings disappointments away”.
Steve Clayton, fund manager at Hargreaves Lansdown, said: “This year should see the company return to growth, but not until the second half.
“Crestor, the company’s flagship super-statin, is coming off-patent and the sharp drop in sales here is masking growth in newly developed and launched products.”