AstraZeneca is today making a regulatory disclosure following the grant of share awards to the company’s new Chief Executive Officer Pascal Soriot in compensation for the forfeiture of long-term incentives from his previous employer.
Additionally, the Company is providing details of Pascal Soriot’s remuneration package. AstraZeneca’s executives are incentivised with a mix of salary, bonus and share elements to align their interests with those of shareholders in order to promote AstraZeneca’s success and competitiveness in the pharmaceutical sector.
Pascal Soriot’s remuneration has the following key elements:
- A base salary of £1.1m per annum
- A target annual bonus of 100% of base salary (with a range of 0-180%)
- A target expected value for annual Long Term Incentive awards of 250% of base salary
- Compensation for the loss of his long-term incentives from his previous employer, to a value of £4m.
In awarding this compensation, the principle governing the decision of the Remuneration Committee was that the buy-out should be implemented only in AstraZeneca shares. In addition, this should be in circumstances where the vesting and the holding period (in the case of the AstraZeneca Investment Plan award) operate over a period of many years. Compensation has been awarded on the following basis:
- 50:50 combination in the AstraZeneca Investment Plan (AZIP) and restricted share awards
- The existing performance hurdles (dividend and dividend cover) and the four-year vesting plus four-year holding periods of the AZIP apply
- The vesting schedule for the portion delivered through restricted share awards is 40% on the first anniversary of commencement of his employment with AstraZeneca, 30% on the second anniversary and 30% on the third, subject to his continued employment with AstraZeneca.
- In respect of forfeited bonus opportunity for 2012 from his previous employer, he has been paid at the target rate of his previous employer, pro-rated from 1 January 2012 until 30 September 2012 (the date of termination.) This amounts to £991,080 which he is required to invest, after the payment of income tax, in AstraZeneca shares.
- In relation to pension arrangements, AstraZeneca will contribute 24% of Mr Soriot’s base salary which he may choose to invest in the defined contribution pension scheme or take as a cash equivalent.
- The notice period in his service contract will be two years initially, reducing by one month for each month of service until it stabilizes at a 12 month notice period.
- In line with standard practice, full remuneration details will be included in the Annual Report for 2012, published in April 2013.
Ann-Leena Mikiver +46 8 553 260 20
James Ward-Lilley +44 20 7604 8122 mob: +44 7785 432613
Karl Hård +44 20 7604 8123 mob: +44 7789 654364
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