There can’t be many company bosses in Britain, or elsewhere in the world, “more deserving of a decent bonus this year than AstraZeneca’s Pascal Soriot”, said Ben Marlow in The Daily Telegraph. No other pharmaceutical giant pledged to produce a jab on a not-for-profit basis, and Astra’s AZD1222 has been “pivotal in turning the tide” against a disease that has infected 160 million and killed 3.3 million worldwide.
Yet, incredibly, the company’s plans to reward its French boss have encountered “a storm of protest” from shareholders aghast at plans to hike his pay package from £15.4m to a maximum of £17.8m. The “faceless” but influential Investment Association waded in with a so-called “amber-top” warning – its second highest level of alert. Institutional investors Aviva and Standard Life Aberdeen (soon to be rebranded as Abrdn) both voted against the proposals, along with 40% of other investors at this week’s AGM. So Soriot will get his bonus – but he gets an undeserved punch on the nose too.
“Seconds out. In the blue corner, the man who saved the world. In the red? A bunch of corporate governance box-tickers. Who would you want to win,” asked Alistair Osborne in The Times. In fairness, this row was “a bit more nuanced than that”. Astra has “naughtily flouted” a City rule that changes to pay policy must be “three-year, not annual” events. Moreover, bumping up Soriot’s potential bonus to 900% of his £1.33m salary is unheard of at a big FTSE 100 group, and “comes perilously close to the symbolic no-no of 1,000%”. Still, “rules are there to be broken”.
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It’s hard to argue that Soriot’s contribution isn’t worth £18m: his brave gamble on the Astra/Oxford jab “is the key reason for Britain’s faster Covid recovery”. What’s more, Astra shareholders have had £30bn of capital value since Soriot rejected Pfizer’s takeover bid in 2014. “Throwing big money at your top team might look insensitive” amid a painful pandemic, said Lee Wild of Interactive Investor on ii.co.uk – but too many executives get rewarded for failure. Pascal Soriot isn’t one of them.
Funnily enough, said Helen Thomas in the FT, “it turns out the system can’t really cope with paying for success either”. And there’s the rub, said Patrick Hosking in The Times. Executive pay is “like an arms race”, and Soriot’s 900% will set “a new benchmark” for good and poor performers alike. Astra investors had an unattractive choice between “disloyalty to a world-beating company”, and “opening the floodgates to more opportunistic, precedent-smashing, norm-flouting pay proposals”. A pity Soriot couldn’t “settle for a knighthood instead”.
