AstraZeneca has suffered a shareholder revolt over pay at its annual general meeting (AGM) as investors rejected its remuneration plan for the second year running.
The pharmaceutical giant is set to pay chief executive Pascal Soriot £9.4 million and at the AGM 35% of votes cast went against the firm’s remuneration report.
The firm said it was “disappointed” by the result because it had made significant changes to its pay policy after engaging with shareholders.
In a statement, AstraZeneca said: “The remuneration committee has already engaged with a number of shareholders to understand the reasoning behind their decisions not to support the remuneration report and will continue to engage with shareholders during 2018 to determine how best to address their concerns.”
This year should see the company return to growth, but not until the second halfSteve Clayton, fund manager at Hargreaves Lansdown
Shareholders also rebelled against AstraZeneca’s pay plans 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 had been an attempt to address some investors’ concerns since last year, but that there were still issues around how targets were disclosed.
Pensions and Investment Research Consultants 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 (£277 million), saying it was hit by falling margins, administrative costs and increasing competition.
Revenues came in at 5.17 billion US dollars (£3.83 billion), missing consensus estimates of 5.18 billion US dollars (£3.84 billion).
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.”