AstraZeneca PLC CEO Rewarded With 5% Pay Raise After Fending Off Pfizer
March 11, 2015
By Mark Terry, BioSpace.com Breaking News Staff
U.K.-based AstraZeneca PLC announced in its 2014 annual report on that CEO Pascal Soriot received a 5 percent pay increase partly as a result of his successful fight against a takeover by New York-based Pfizer Inc. . Despite that, the company announced a drop in profits.
In 2013 Soriot received £3.3 million, which was partly made up of an annual bonus of £1.9 million, or 170 percent of his base salary. His pay in 2014 was £3.5 million. He is expected to get even more in 2016 as part of a long-term incentive deal that could bring in 250 percent of his base salary.
In May 2014 Pfizer bid $119 billion for AstraZeneca, but the deal fell apart. AstraZeneca indicated the deal undervalued the company and that it wanted to continue as an independent entity.
“When Pfizer approached AstraZeneca during 2014, our responsibilities as Directors were clear: to act in a way that promoted the success of the Company for the benefit of its shareholders,” Soriot stated in the 2014 Annual Report. “In addition to assessing the value and deliverability of Pfizer’s proposals, we had to have regard to the long-term consequences of our decisions, the interests of employees, relationships with customers, our impact on the wider community, including patients, and the reputation of the Company.”
The company reported 2014 overall revenue of $26.095 billion, up from $25.711 billion in 2013, but down from 2012’s numbers of $27.973 billion. However, profit for 2014 was reported as $1.235 billion, down from $2.571 billion in 2013, and significantly down from $6.270 billion in 2012. Core operating profit was reported as $6.937 billion, down from $8.390 billion in 2013 and from $11.159 billion in 2012.
Revenue increased by 3 percent. On an actual basis revenue increased by 1 percent as a result of exchange rate movements. Core operating profit dropped by 13 percent, but Core EPS were $4.28, a drop of 8 percent.
“Our performance reflected the delayed launch of generic Nexium (esomeprazole) in the U.S. as well as the accelerating performance of our growth platforms, which now contribute over half of our revenues,” said Soriot in the annual report. “Taken together, they more than offset the impact of loss of exclusivity. Our strong performance in Emerging Markets was a particular highlight, with China becoming our second largest market.”
The loss of exclusivity specifically refers to upcoming loss of patent protection for Nexium and Crestor in the U.S. and Europe. Soriot also indicated that the company expected sales revenue to continue to drop in 2014 by a “mid single-digit percent at CER.” To battle that loss, they will look for external collaborations and licensing deals.
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