AstraZeneca’s declines in sales and profits last year—which the company hopes to reverse in future through a restructuring that involves cutting 5,600 jobs through 2016—didn’t dent the wallet of its CEO, as Pascal Soriot finished 2013 with a bonus that was 94% of the potential maximum.
The Renumeration Committee of the company’s board of directors awarded Soriot a bonus of £1.87 million (approximately $3.085 million) for 2013, part of the £3.344 million ($5.519 million) in total compensation paid to the CEO last year.
Soriot’s total compensation is actually 9.5% below that of 2012—however, 81% of his total comp that year consisted of cash and stock reflecting the benefits he forfeited when he left Roche, where he was CEO of its pharmaceutical division. That year, Soriot collected a bonus of £334,000 (more than $551,000), reflecting in part his joining the company late that year.
Soriot’s bigger bonus amounted to 170% of his 2013 base salary of £1.1 million ($1.816 million). During 2013, AstraZeneca began laying off 2,300 selling, general, and administrative (SG&A) employees, and announced a restructuring of its R&D effort that will shrink its global R&D workforce by 1,600 companywide and centralize research in three hubs—adding to job-cutting efforts announced in 2012. Earlier this year, AstraZeneca said it will jettison another 550 jobs, reflecting in part the shutdown of an R&D site in Bangalore, India.
Soriot has trumpeted the company’s resurgence in drug development activity, including a near doubling of new molecular entities (NMEs) over the past year.
This year, Soriot is getting a raise of 3% or £33,000 (almost $54,500) in his base salary—the same 3% as the base pay increase for the U.K. employee population, according to the company. AstraZeneca also agreed to raise his defined contribution pension funding from 24% of base pay per year to 30% of base pay per year.
Soriot’s bonus and the rest of his 2013 compensation were disclosed by AstraZeneca in its 2013 Annual Report, released yesterday. The annual report justified the increase in pension funding as one “we believe to be more in line with current market practice for FTSE30 CEOs,” referring to an index of the top 30 companies listed on the London Stock Exchange.
AstraZeneca finished last year with profit of $2.571 billion, down 59% from $6.270 billion in 2012. The company’s 2013 revenue of $25.711 billion was about 6% below the previous year’s $27.973 billion. Soriot has blamed the slides on patent expirations and healthcare reform.