AstraZeneca and HSBC chief executives next in line to face shareholder votes as report condemns boardroom pay practices as “broken” and “not fit for purpose”
Boardroom pay practice is to be blasted as “not fit for purpose” tomorrow in an Investment Association report.
It is published as AstraZeneca is the latest firm facing the prospect of a shareholder revolt over chief executive Pascal Soriot's £8.4m pay package.
Morning Wire has learned Royal London Asset Management (RLAM), which owns more than £500m, or around one per cent, of Astra shares, has voted against his pay.
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RLAM corporate governance manager Ashley Hamilton Claxton told Morning Wire: “Where we were disappointed was the company decided not to link the pay to the £45bn revenue target by 2023, which we have been speaking to them about."
Pensions and Investment Research Consultants (Pirc), meanwhile, is urging other shareholders to follow suit ahead of next week’s AGM.
Pirc has also recommended the £7.3m package of HSBC’s chief executive Stuart Gulliver be rejected.
But Morning Wire spoke to two organisations with shareholdings totalling nearly three per cent which said they would be voting to accept the package ahead of Friday's AGM.
Sky News first reported on the Investment Association report, which condemns a “remuneration creep”.
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An AstraZeneca spokesman said: “The Remuneration Committee have set challenging performance measures for both the annual bonus and the long-term incentive plan that are directly aligned to the successful delivery of our long-term business plan, which is itself intended to deliver the 2023 revenue target.
"While some shareholders have stated they would like to see a direct link between executive pay and the 2023 revenue target, that is not necessarily the view of the majority."
They added: “It should also be noted that in the period Jan 2013–Dec 2015, AstraZeneca has outperformed the largest FTSE 100 companies in Total Shareholder Return – a measure that clearly benefits all shareholders.”
An HSBC spokesman said: "We have had an active and constructive dialogue with all our major shareholders with respect to our remuneration policy."