AstraZeneca is preparing to propose a significantly increased pay package for its chief executive, Pascal Soriot, potentially setting a new record for boardroom remuneration in the UK. Soriot, who currently holds the position as the highest-paid leader among FTSE 100 companies with earnings of £17.7 million in 2023, could see his maximum compensation reach up to £28 million if the company’s forthcoming remuneration policy is approved.
The proposed package reflects a broader trend among UK firms toward higher executive pay, which is increasingly aligning with the levels seen in U.S. boardrooms. AstraZeneca is seeking to narrow the pay gap with its global pharmaceutical peers, a point emphasized by Sheri McCoy, chair of AstraZeneca’s remuneration committee, in the company’s latest annual report. McCoy highlighted the challenges in attracting and retaining senior executives amid limits on variable pay and noted that bonus awards, often delivered in shares, are becoming more prominent as stock markets remain strong.
The potential rise in Soriot’s pay primarily stems from an expansion of the company’s long-term incentive plan (LTIP), a variable component of his package that last year accounted for £11.6 million. Under current rules, this element can be worth up to 850 percent of his £1.6 million salary, with plans to increase this cap. Additionally, the ceiling on his annual bonus, currently limited to three times his base salary, is expected to be raised.
This move coincides with similar pay proposals from other leading FTSE 100 companies. Rolls-Royce CEO Tufan Erginbilgic, who earned £4.4 million in 2023 after steering a notable corporate recovery, could see his compensation rise to as much as £24.4 million if performance targets are met. Unilever’s newly appointed CEO Fernando Fernandez may also earn more than £20 million under a best-case scenario. Meanwhile, Shell’s Wael Sawan is poised for a substantial increase from £13.8 million to roughly double that amount, paralleling robust profit growth linked to elevated energy prices in the wake of geopolitical tensions in the Middle East.
AstraZeneca has been consulting shareholders on the revised pay framework ahead of a binding vote at its annual general meeting next year. Despite the company’s efforts, some investors remain critical of escalating executive pay levels, particularly as government proposals aim to remove the annual advisory vote on boardroom remuneration—a mechanism often used by shareholders to signal dissatisfaction with compensation packages.
Although UK executive pay continues to climb, it typically still trails behind U.S. counterparts. A report by pay advisory firm ISS Corporate indicated that the average FTSE 100 chief executive earns less than half the £12.2 million paid last year to the average S&P 500 CEO. Analysts attribute this disparity to differences in corporate governance—such as U.S. executives frequently holding combined CEO and chair roles—and greater profit margins among American companies. Additionally, UK executives may weigh non-financial considerations, including personal and family ties, in their career decisions.
An AstraZeneca spokesperson stated that discussions about future executive remuneration remain ongoing and that details of the three-year pay policy are still being finalized, underscoring that speculation about exact figures is premature.