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(USGovernment-News.Com, November 13, 2012 ) Victoria, Australia- Pascal Soriot, the new CEO of drug maker AstraZeneca, arrived at the company at the start of October. The London-based company has just released details of his compensation, and the pay package is already drawing objections from a shareholder group.
A veterinarian by training, the French-born CEO was lured away from Roche, a rival Swiss firm, where he was COO of its drug division. Previously, he was Genentech’s CEO and helped integrate the biotech firm into Roche, which acquired it in 2009.
To compensate for the long-term incentive package he loses at Roche, Dr. Soriot will receive a “golden hello” payment of £4 million (the equivalent of US $6.44 million) in AstraZeneca shares. He will also receive £991,080 as recompense for losing a bonus he would have received as Roche. The deal requires him to invest that amount in AstraZeneca shares.
The entire £4 million “golden hello” payment will not go to Dr. Soriot for eight years, and whether he will receive the full amount will depend on the company’s performance. He nevertheless is likely to receive £2 million within three years.
He will receive an annual base salary of £1.1 million, compared with his predecessor’s base salary of nearly £1 million. He will also get a bonus, targeted at 100% of base pay, which could climb up to 180%. His total compensation package this year is worth £10 million, and a shareholder group is suggesting the performance standards for some parts of the package are not sufficiently demanding.
Soriot succeeds former CEO David Brennan, who unexpectedly announced his resignation the morning of AstraZeneca's annual meeting in April, in part because of a pay-related dispute with shareholders. An industry veteran, Brennan last year received a total £9 million, despite an 11% drop in Q1 revenues and a 44% decline in net profits. On his way out, Brennan collected a £4.6 million payment, but AstraZeneca’s remuneration committee cut back his bonus and stock awards by almost £4 million.
AstraZeneca faces new generic competition for some key products, among them Nexium and Seroquel IR, and has a sparse last-stage pipeline of new products. The newly-arrived CEO has already taken some early steps. He has ordered up a strategy review due for release by late January. The company has also focusing on promising new markets and broadened its research ties with outside groups, such as the UK’s Medical Research Council.
Another early action by the new CEO was freezing buyback on company shares. Some observers think that step he may indicate he wants to build a corporate war chest for a large acquisition, such as Forest Laboratories.
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