Shareholders approve AstraZeneca's 2024 pay proposal for CEO Pascal Soriot despite proxy adviser discontent

History is repeating for AstraZeneca CEO Pascal Soriot, who successfully dodged an executive pay revolt at the company’s annual meeting Thursday, echoing a similar situation that played out in 2021.

Out of more than 1.18 billion votes cast by AZ shareholders this week, 64.43% of investors voted in favor of an updated pay policy that could see Soriot earn upward of 18.7 million pounds sterling ($23.5 million) for his performance this year, according to a summary of AstraZeneca’s annual meeting results.

AstraZeneca said it was pleased with the outcome.

“In particular, the board thanks the majority of our shareholders who have supported the remuneration policy … and will continue to engage with our shareholders and the proxy advisors to explain our need for global benchmarks and pay for performance,” the company said in a statement.

Investors’ approval of the 2024 pay package comes shortly after influential advisory firms Institutional Shareholder Services and Glass Lewis urged shareholders to vote against the proposal, which could see Soriot earn long-term performance and incentive payments worth up to 850% of his 1.49 million pound base salary this year. The plan also includes a maximum bonus increase to 300% of base pay.

Earlier this month, ISS argued that Soriot’s proposed pay increase for 2024 was “unprecedented” among companies on the U.K.-based Financial Times Stock Exchange, arguing the plan would “further [widen] the variable pay gap” with other companies on the index.

Glass Lewis, for its part, pointed to an “absence of compelling evidence” that Soriot has been underpaid relative to his peers in recent years.

AstraZeneca previously stated in its shareholder proposal that the pay changes were necessary to “increase the competitiveness” of its performance-based pay versus other global biopharma companies.

“Given the size, complexity and global reach of AstraZeneca, the committee does not consider the constituents of the FTSE 100 to be an appropriate group against which to benchmark remuneration,” the company noted.

Not all shareholders were swayed by ISS and Glass Lewis’ appeal, with GQG Partners’ chairman and chief investment officer, Rajiv Jain, going so far as to suggest earlier this month that Soriot was in fact being “massively underpaid," as quoted by the Financial Times.

The call to action from ISS and Glass Lewis certainly wasn’t the first time Soriot’s pay has come under fire—nor is this the first time shareholders have ultimately sided with AZ's remuneration policies.

In 2021, 60.19% of investors approved Soriot’s proposed pay package for the year after ISS, Glass Lewis, and other advisers similarly sought to deny Soriot of sweetened bonuses and equity that the organizations had deemed “excessive.”

While AZ has previously argued that Soriot’s pay is eclipsed by some of his other global pharma peers, the CEO consistently ranks among the top-paid executives at European pharmas.

In 2023, for instance, Soriot’s total compensation package outpaced pay for CEOs at other European drug majors like Novartis, Roche, Novo Nordisk, Sanofi and GSK.

AZ recently awarded Soriot 16.9 million pounds (around $21.3 million) for his work in 2023, an 11% increase over the 15.1 million pounds he collected the previous year.