Top AstraZeneca investor backs Soriot and his 'golden hello'

At least one big AstraZeneca ($AZN) shareholder isn't concerned about CEO Pascal Soriot's pay package. Days after U.K. union leaders called on investors to vote down Soriot's 2012 compensation, because of a £4 million "golden hello," a "top five" shareholder threw his weight behind the new CEO.

AZ CEO Pascal Soriot

AstraZeneca has plenty of struggles ahead, this anonymous investor told The Telegraph. It has to beef up its pipeline. It has to bring new drugs to market. And it has to sell them to increasingly cost-conscious payers. But Soriot has already made some strong moves, the shareholder said, just 6 months into his tenure. And his so-called golden hello has to be invested back into AstraZeneca shares, he said, which makes it "a better alignment of interests" than other sign-on bonuses.

There's no doubt that Soriot has made some dramatic changes at the company. He swept out his R&D chief, Martin Mackay, and shunted aside his leading biologics executive, Peter Greenleaf, who'd been leading the company's MedImmune unit. He restructured his top management, creating one triumverate on the R&D side and another in commercial operations. He instituted another big round of layoffs--5,050 total, including some 2,300 in sales and administrative departments. He reorganized R&D into three big clusters. He announced plans to move AstraZeneca's headquarters to one of those clusters in Cambridge, England. And he's been making pipeline-oriented deals, including two announced today.

"AstraZeneca has tremendous operational challenges," the shareholder told the newspaper. "The company needed to recruit a high-quality CEO against the background of weak results, and Soriot has stamped his arrival reasonably well so far."

Not everyone agrees, obviously; opinions about AstraZeneca's fortunes are all over the map. Standard & Poor's, for instance, recently cut the company's credit rating, saying that the company's sales will probably continue sloping downward in the near term. For 2013, S&P expects a 9% slide. The company itself figures sales will drop by a "mid- to high-single-digit percentage." The question is whether Soriot's dealmaking can reverse the tide.

- get the Telegraph story