It was framed as a pitched battle between two opposing camps in AstraZeneca PLC (LSE:AZN)’s shareholder base.
On one side, chief executive Pascal Soriot’s 11% annual remuneration hike was egregious, excessive and symbolic of capitalist greed.
On the other side, it was a suitable pay hike for a job well done. In fact, the £18.7 million worth of salaries and bonuses wasn’t enough, said one vocal institutional shareholder.
We have covered the arguments for both camps – as well as the disparity between biotech executives’ pay on both sides of the pond – already.
But with shareholders greenlighting the remuneration policy at Thursday's annual general meeting, should we let democracy prevail and let the matter pass?
First and foremost, though it made for a compelling narrative, this AGM vote was far less divided than you think.
Yes, 35% of shareholders voting against the increase is a not-insignificant figure, but it’s actually less than the last vote on director pay in May 2021.
Back then, nearly 40% of shareholders voted against AstraZeneca’s directors’ remuneration policy. Funnily enough, it coincided with a decrease in Soriot’s pay from the year earlier, though Covid-era factors likely played into his £2 million-odd pay cut.
Historically speaking, the yes vote has always gravitated toward the 60% mark, so why this year’s vote was so hotly watched is a little unclear.
Pay hikes for other British big caps have been far less divisive among shareholders.
Take British Gas owner Centrica. Boss Chris O’Shea saw his earnings nearly double to £8.2 million this year. At Centrica’s last AGM in June 2023, O’Shea’s pay packet received near-universal support among shareholders (although it did receive scrutiny from unions, shareholder abrdn and the wider cost-of-living crisis-hit public).
Centrica is worth 24 times less than AstraZeneca, while its earnings were undoubtedly inflated due to soaring energy costs, yet the vast majority of shareholders saw no issue with O’Shea taking home a handsome bonus.
For the average financial reporter on a five-figure salary, £18.7 million, £8.2 million, or frankly £1 million is a life-changing number beyond comprehension, but that sort of misses the point.
Under Soriot’s leadership, AstraZeneca has added £81 billion of value in the past five years. Does that justify a few extra million? You can be the judge on that one.