A committee at AstraZeneca is examining ways to link the pay of CEO Pascal Soriot and other top managers more directly to the company's target of generating sales of $45 billion by 2023. At present, the performance of executives is evaluated on two criteria linked to AstraZeneca's dividend and core earnings.
In 2014, the drugmaker said that it expects "strong and consistent" revenue growth between 2017 and 2023, with sales of more than $45 billion by the end of the period. The announcement came as AstraZeneca, which also indicated at the time that growth in core earnings per share is expected to exceed revenue growth, fought off a hostile takeover attempt from Pfizer.
However, last month AstraZeneca indicated that both sales and earnings per share are expected to decline by a low to mid single-digit percentage this year, placing the executive team's performance targets under scrutiny. In addition, The Sunday Times reported that more than 20 percent of shareholders may reject a remuneration package for Soriot.
"Some shareholders have stated they would like to see a direct link between executive pay and the 2023 revenue target, but that is not necessarily the view of the majority," an AstraZeneca spokesman said. "However, the remuneration committee will continue to evaluate ways in which a more transparent link can be made," the spokesman added. AstraZeneca also noted that the panel will continue to consult with major shareholders on proposals to "further simplify our long-term incentive plans for the future where practicable."
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