Will sparks fly at AstraZeneca, NatWest and BAT AGMs?

A new pay deal for AstraZeneca (LSE:AZN) boss Pascal Soriot is set to be a potential AGM flashpoint after a year in which the FTSE 100’s highest earning chief executive received £16.85 million.

The drugs giant has proposed that Soriot’s maximum opportunity under the long-term incentive scheme increases to 850% of salary, pointing to the competition for talent in the global and European pharma market. But voting agency Glass Lewis regards the move as excessive and has recommended shareholders vote against the new remuneration policy.

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Astra’s meeting is one of the first in the 2024 AGM season and will be followed by NatWest Group (LSE:NWG) later in April. The bank is also holding a virtual shareholder event, when the lender’s new chief executive and chair will answer questions a week before the annual meeting takes place. 

Here are some of the other AGMs to look out for in the coming weeks:

AstraZeneca (11/4), NatWest (23/4), Taylor Wimpey (LSE:TW.) (23/4), British American Tobacco (24/4), Croda International (LSE:CRDA) (24/4), Entain (LSE:ENT) (24/4), BP (LSE:BP.)(25/4),  RELX (LSE:REL)(25/4), Persimmon (LSE:PSN) (25/4), Admiral Group (LSE:ADM)(25/4), Beazley (LSE:BEZ) (25/4), Pearson (LSE:PSON) (26/4), Ocado Group (LSE:OCDO) (29/4), Anglo American (LSE:AAL) (30/4), Unilever (LSE:ULVR) (1/5) Aviva (LSE:AV.) (2/5), Reckitt Benckiser Group (LSE:RKT) (2/5), ITV (LSE:ITV)(2/5), Howden Joinery Group (LSE:HWDN) (2/5), HSBC Holdings (LSE:HSBA) (3/5), InterContinental Hotels Group (LSE:IHG) (3/5), GSK (LSE:GSK) (8/5), Haleon (LSE:HLN) (8/5), Rentokil Initial (LSE:RTO) (8/5),BAE Systems (LSE:BA.) (9/5), Rightmove (LSE:RMV) (10/5), Lloyds Banking Group (LSE:LLOY) (16/5), Shell (LSE:SHEL) (21/5), Rolls-Royce Holdings (LSE:RR.) (23/5), Legal & General Group (LSE:LGEN) (23/5) and Glencore (LSE:GLEN) (29/5).

AstraZeneca

When: 2.30pm, Thursday 11 April.

Where: On the Lumi online platform and at the broadcast venue, the Kia Oval, Kennington, London, SE11 5SS. 

How to participate: This will be a digitally-enabled meeting and broadcast live. The deadline to register questions and to submit votes electronically via the Equiniti Shareview website is 2.30pm, Monday 9 April. More AGM details can be found here. 

Who’s in the chair? Michel Demaré, who is the ex-finance boss of industrial conglomerate ABB and former chair of agricultural science business Syngenta, is hosting his first AstraZeneca AGM.

How did the company do in 2023? Revenues were 3% higher at $45.8 billion (£36.2 billion), up 13% when excluding Covid-19 medicines. Core operating profit rose 9% to $14.5 billion (£11.5 billion) with earnings per share 9% higher at $7.26. A second interim dividend of $1.97 (156p) was paid on Monday (25 March), resulting in a total for the year of $2.90.

How have shares performed? Down 6% in 2023 to 10,600p (10,598p on Wednesday).

How much is the boss paid? Pascal Soriot’s base pay for this year has increased by 4% to £1.5 million. His total remuneration for last year amounted to £16.85 million, the highest figure since he became chief executive in October 2012. The previous year’s was £15.1 million, having been £15.9 million in 2020. The biggest contribution to 2023’s figure was £12.9 million from the 88% vesting of long-term incentive shares granted in 2021 when the price stood at 6,844p. As well as share price appreciation, the outcome reflected Astra’s sixth place among peers for total shareholder return and its growth and therapy leadership. Soriot also got cash and deferred shares worth £2.84 million after the annual bonus scheme paid 79.5% of the maximum. Assessing the chief executive’s performance, the remuneration committee said: “Mr Soriot has skillfully steered AstraZeneca through another successful year. Commercial execution across all therapy areas and regions was very strong, underpinned by robust manufacturing and supply.” 

What’s in the new remuneration policy? The policy was last approved at the 2021 AGM with 60.19% of votes in favour. The remuneration committee plans to increase the maximum award for the chief executive under the long-term incentive scheme to 850% of base pay from the current 650%, subject to three-year performance targets and a two-year holding period. This new maximum would apply to Soriot’s 2024 remuneration provided that it is approved by shareholders. It will also increase his target annual bonus opportunity, resulting in a new maximum bonus of 300% of base pay compared with 250% currently. 

Why the increase? The remuneration committee said it recognised the proposals are material if viewed in a UK context. However, it believes the changes are necessary in the context of the competition for talent in the global and European pharma market. Since 2021 it points out that the company is more complex following the integration of Alexion and the addition of new therapy areas in rare diseases and vaccines and immune therapies. Total shareholder return has been 40%, with total revenues up from $26.6 billion in 2020 to $45.8 billion in 2023.

What’s the view of voting agencies? Glass Lewis recommends shareholders oppose the binding vote on the new three remuneration policy, highlighting the “excessive upward adjustment” to potential remuneration levels for Soriot. On the annual remuneration report it notes that Soriot’s pay outpaced the compensation given to chief executives at both country and European industry peers but that this was largely attributable to the value of long-term incentive awards that were subject to stretching performance conditions. It recommends shareholders vote in favour of the annual remuneration report. 

How did last year’s AGM go? The vote on the annual remuneration report got 94.23% support. 

How’s the company doing on diversity? Women held 46% of board roles at the end of December, including the position of chief financial officer. Four members identify as being from a non-white ethnic minority background.

NatWest

When: 11am, Tuesday 23 April.

Where: Gogarburn, Edinburgh, EH12 1HQ.

How to participate:  A virtual shareholder event is due to be held at 6pm, Monday 15 April. The Zoom webinar will give shareholders an opportunity to engage with incoming chair Rick Haythornthwaite and chief executive Paul Thwaite prior to voting on the business of the AGM. Those wishing to ask a question at the virtual event are encouraged to do so by emailing shareholderevent@natwest.com by Friday 5 April. The deadline for AGM voting instructions is Friday 19 April, with further meeting details available here.

Who’s in the chair? Rick Haythornthwaite is due to host his first AGM, having joined the board in January. He succeeds Howard Davies, who held the role for nine years. The former Invensys chief executive and current Ocado chair will be paid £775,000 a year.

How did the company do in 2023?  Income rose 10% on 2022’s level to £14.3 billion, with total expenses up 5%. Operating profit of £6.2 billion rose 20% and the return on tangible equity improved to 17.8% from 12.3% the previous year. Shareholder returns of £3.6 billion equivalent to 40p a share included plans for a £1 billion final dividend of 11.5p, which is due to be paid on 29 April. The total dividend for the year rose by 26% to 17p. 

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How have shares performed? Down 18% in 2023 to 219.4p (261.9p on Wednesday).

How much is the boss paid? Paul Thwaite became interim chief executive in July before his permanent appointment in February on a salary of £1.15 million. The remuneration committee points out its executive directors continue to be paid below the target total compensation opportunity of other major UK banks. Thwaite’s annual bonus for 2023 amounted to £245,000 based on 53.6% of the maximum opportunity and he also received an estimated £508,000 from the vesting of long-term incentives, bringing his total for the year to £1.7 million.

How much did Alison Rose receive? Her total remuneration for 2023 amounted to £1.45 million after no bonus or variable remuneration was paid. The previous year’s total was £5.25 million. Her notice period runs until 26 July, after which any unvested shares out of the £5.1 million still held at the end of 2023 will lapse. Her shareholding requirement will continue to apply for a period of two years from the date of her employment ending.

What about staff bonus payments? The bonus pool of £356 million is 3% lower despite a larger eligible headcount. The smaller outturn reflects the impact on shareholders of the company’s missed guidance, despite a 20.4% increase in operating profit. The annual report discloses that 946 employees got total remuneration above £250,000 last year. Among individuals whose activities have a material influence over the company’s performance or risk profile, 75 picked up more than one million euros (£860,000). One got between 3.5 million and 4 million euros (£3 million-£3.4 million).

How will the bank respond to the removal of the bonus cap? NatWest has increased its normal maximum variable-to-fixed pay ratio to 2:1, although this is expected to be used on a gradual and targeted basis. The remuneration committee said: “This should align NatWest more closely to peers, ensuring we have the flexibility to remain competitive.” It intends to engage with large shareholders and voting advisory bodies prior to putting a new remuneration policy for approval at next year’s AGM. 

How did last year’s AGM go? The annual remuneration report was approved with 97.35% of votes in favour.

How’s the company doing on diversity? Women held four of the ten boardroom positions at the end of 2023, including one senior role. One director is from an ethnic minority background. 

British American Tobacco

When: 11.30am,Wednesday 24 April.

Where: Hilton London Bankside, 2-8 Great Suffolk St, London, SE1 0UG.

How to participate:British American Tobacco (LSE:BATS) will endeavour to respond to questions submitted by Tuesday 16 April in time for the voting deadline of 11.30am, Monday 22 April. More AGM details can be found here.

Who’s in the chair? Luc Jobin, the former chief executive of Imperial Brands Canada, has been chairman since April 2021 and non-executive director since July 2017.

How did the company do in 2023? Revenues across cigarettes and vaping products fell 1.3% to £27.28 billion but were 3.1% higher on an adjusted basis. New categories achieved profitability two years earlier than expected following underlying sales growth of 21% to £3.3 billion. Adjusted profits rose 3.1% to £12.46 billion, excluding a write-down of £27.3 billion on the value of acquired US assets. Cash generated from operations lifted 2.9% to £37.8 billion. Shareholders will receive four instalments of 58.87p a share between 2 May and 3 February next year, representing an overall increase of 2% on a year earlier.

How have shares performed? Down 30% in 2023 to 2,295.5p (2,373p on Wednesday).

How much is the boss paid? Former finance director Tadeu Marroco, who was appointed in May on a salary of £1.34 million, has been given a 3% pay rise for this year. His total remuneration for 2023 amounted to £4.6 million, including £1.65 million in cash and shares after the annual bonus scheme paid 61.3% of the maximum. This was driven by the meeting of targets on new categories and cash generation. The 38.2% vesting of long-term incentives contributed £1.37 million, down from £2.3 million the previous year. The company ranked 13th out of 24 peers for total shareholder return, meaning no vesting under this measure.

What about his predecessor? Jack Bowles received no annual bonus while shares awarded under 2021’s long-term incentive scheme lapsed. He will receive one year’s salary of £1.3 million as part of his 12-month notice period. Bowles got a total of £9 million in 2022, including £4.6 million from the vesting of long-term incentives.

How did last year’s AGM go? The annual remuneration report was approved with 95.18% of votes in favour.

What’s the view of voting agencies? Glass Lewis believes the board has provided an appropriate explanation for adjustments to performance targets under BAT’s long-term incentive plan, adding that these remain challenging. The agency recommends shareholders vote in favour of the annual remuneration report.

How’s the company doing on diversity? Following the 2024 AGM, women will hold 45% of board roles and 33% of directors will be from an ethnic minority background.