AstraZeneca ($AZN) didn't send flowers to Pascal Soriot to woo him away from Roche ($RHHBY). No, its new chief executive got something much more valuable in the bargain: A £4 million ($ 6.44 million) payment.
It's not exactly a signing bonus, though. The $6.44 million compensates Soriot for his loss of long-term incentive compensation from Roche. Soriot had been chief operating officer and pharma chief at the Swiss-based drugmaker, after a stint overseeing the integration of its U.S. unit Genentech, bought in 2009.
AstraZeneca disclosed the arrangement alongside Soriot's normal pay package. His base salary will be £1.1 million. Bonus: Up to 100%, or another £1.1 million. Annual long-term incentive awards are expected to amount to 250%, the company said; that could add another £2.75 million. Total possible: £4.95 million, or almost $8 million. With that extra $6.4 million, Soriot would be looking at more than $14 million for his first year on the job. (Vesting and other details are available in AZ's release.)
As far as pharma CEO pay goes, however, that's not even close to the top. U.S.-based drug companies have been known to pay their CEOs upwards of $20 million. In fact, that $14 million or so would barely qualify Soriot for FiercePharma's highest-paid executives list.
If Soriot can turn the AstraZeneca ship, he may be well worth the price. The company reported dismal sales last week, thanks to generic competition, and it has suffered some key R&D setbacks recently. Soriot hinted at some potential moves, including "business development," a.k.a. deals, which would fit with his immediate halt to stock buybacks on his first day at the helm. But the company won't offer a detailed strategy outline till early next year.
- read the announcement from AZ
- see the Reuters news
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