Pharmaceutical company, AstraZeneca, have come under fire after paying its new chief executive £6.5m for three months work last year.
The Local Authority Pension fund Forum (LAPFF), one of Britain’s largest shareholder groups has called on its members to vote against AstraZeneca’s remuneration report at the company’s annual meeting next week.
The LAPFF, which represents £115bn in assets, issued the “Expectations for Executive Pay” report last month, proposed a new approach to remuneration to combat the upward spiral in executive pay.
Kieran Quinn, chair of the Forum, said: “There has been too much emphasis on the structure of pay. In these tough times remuneration committees need to focus more on ensuring that they are not over-paying, and that they are being sensitive to the difficult economic environment they, their investors and their staff face.
“We have set out some challenging proposals for companies. We hope that, as major shareholders in UK companies, we can provide support for remuneration committees that recognise there is a problem and want to do something about it.”
The LAPFF has opposed golden hellos, encouraging the reward of executives for long term positive results.
A spokeswoman for AstraZeneca said: “Our remuneration policy promotes long-term, sustainable growth in shareholder value. We are committed to levels of remuneration that are sufficient to attract, retain and motivate senior employees of the requisite quality, while avoiding paying more than is necessary.”