It's being called the 'Golden Hello.' When AstraZeneca hired Pascal Soirot hired last fall as its new ceo, the drugmaker gave the former Roche exec a healthy $1.5 million to compensate him for a bonus that he had to forfieit, along with a promise of stock worth roughly $6 million based on future performance. But a pension group that owns 2 percent of AstraZeneca shares is outraged over the cash payout.
The Local Authority Pension Fund Forum is advising its members to reject the compensation plant at the upcoming annual meeting on April 25. Even though Soriot is required to invest the payout, after tax, in AstraZeneca (AZN) stock, the pension group believes the drugmaker “breached” its policy of discontinuing the practice of paying “golden hellos."
"Companies should discontinue the practice of paying ‘golden hellos’,” the pension group says in a statement. Forum chairman Kieran Quinn adds: “We don’t think executives should be paid for performance they have not achieved. We will challenge such awards when we see them.” We asked AstraZeneca for comment and will update you accordingly (see the fund statement and alert here and here).
UPDATE: An AstraZeneca spokesman sends us this: “Our remuneration policy promotes long-term, sustainable growth in shareholder value. We are committed to levels of remuneration that are sufficient to attract, retain and motivate senior employees of the requisite quality, while avoiding paying more than is necessary.”