AstraZeneca’s remuneration committee is considering increasing chief executive, Sir Tom McKillop’s pay by as much as 50%, providing the company meets demanding new targets.
According to the Times Online, Sir Tom, who is one of the lowest paid pharmaceutical company heads in the Industry, could see his wages soar to as much as £3.8 million in the 2005 financial year. However, the proposals see his salary linked to both shareholder returns and precise profit targets, which could be increasingly difficult to achieve given the company’s recent run of bad news and subsequent sliding share price [[11/10/04a]], [[20/12/04b]], [[05/01/05a]].
A spokeswoman for the company told PharmaTimes News Online that the proposals are indeed under discussion with major institutional shareholders, but remain subject to the outcome of that process, and could be modified before they are submitted to all shareholders for discussion and approval at the 2005 annual general meeting. She was unable to discuss the proposals in any detail, but confirmed that the company is of the view that “they represent a well considered remuneration policy for a company headquartered in the UK with demanding performance criteria linked to corporate and individual performance and investors’ expectations.”
The proposals are yet to be finalised and it remains to be seen whether AstraZeneca will come up against the same hostility fellow UK firm, GlaxoSmithKline, faced back in 2003 when it proposed offering its chief executive, Jean-Pierre Garnier, a multi-million dollar “golden parachute” should he resign or lose his job [[20/05/03a]]. This was later resolved after the company was forced to review its executive pay scheme [[18/05/04b]].