Firms face pay revolt

TWO MORE large British firms have been hit by showdowns with shareholders, as revolts over executive performance and pay gather pace.

With the AGM season hotting up, pharmaceuticals giant AstraZeneca was last night rocked by figures that showed over half of its shareholder base failing to back the latest remuneration report. Of those who voted, over 38 per cent opposed last year’s pay packages.

The rebellion came after Barclays was forced to defend a 10 per cent rise in its bonus pot to some hostile investors at its annual meeting.

Just under a quarter of voting shareholders rejected the remuneration paid at Barclays last year, with major investors Standard Life speaking out in unusually strong terms.

The disputes come in the wake of a similar revolt at the annual meeting of energy giant BP a fortnight ago, where 13 per cent of shareholders actively opposed the executive pay.

At Barclays’ meeting yesterday, bosses argued that it has to pay competitively to keep its best staff, at a time when US rivals are offering large sums to bankers who jump ship.

“If we are to remain in this prominent position we have to be able to recruit and maintain the best people in the world,” chairman Sir David Walker said.

“We have to pay at a rate which is competitive.”

Earlier in the day AstraZeneca chief executive Pascal Soriot brushed off talk of a potential mega-merger with US pharmaceuticals giant Pfizer, instead laying out an independent business plan that involves spinning off billions of dollars’ worth of non-core assets.

“Large acquisitions can sometimes work but can [also] be very disruptive,” Soriot said, upon announcing an 11 per cent first-quarter drop in core operating profit, compared to a year earlier. AstraZeneca, which employs around 6,700 people in the UK, has seen its shares jump by over 10 per cent in recent days on the back of reports that Pfizer is eyeing a potential £60bn takeover of the firm.

Despite the boost, shareholders are still unhappy at pay policy, with the Local Authority Pension Fund Forum asking AZ to stop awarding so-called “golden hellos”.

Executive pay remains a hot topic, despite a recent study from PwC showing that FTSE 100 chiefs had their bonuses cut last year, and their overall pay hiked by less than the rate of inflation.

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