AZ board to CEO Soriot: Want that big bonus? Show us the money
- After successfully staving off a $100 billion takeover by Pfizer last year, AstraZeneca's (AZ) CEO Pascal Soriot promised revenues of $45 billion by 2023, but sales are down and his bonus is now at stake.
- Sales were down by 6% in Q4 2014—not an encouraging sign that the company is on track to achieve its long-range sales goals.
- Many shareholders feel that Soriot and other managers should have their bonuses linked to performance, especially considering that Soriot and his team are not likely to remain at AZ until 2023.
Last year, Soriot seemed like a hero when he took a stance for AZ's independence in the face of Pfizer's takeover efforts. However, while the price of AZ's stock has risen from $66.16 when Pfizer decided to stop pursuing acquisition to roughly $68.64 in the last few days, the company's sales are weak.
Shareholders are responding by asking for executive pay decreases. According to AZ, however, this type of pay-for-performance feature is already built into the plan for AZ execs. In fact, according to the company, executives are measured by how they deliver "against strategy."
Strategically speaking, the company has very strong growth forecasts, and according to one analyst, Soriot is already at risk of losing $6.14 million in compensation in the next two years if things don't improve.