In major news on UK stocks, AstraZeneca PLC (GB:AZN) assured dividend growth to its shareholders just hours before the vote for its CEO Pascal Soriot’s pay raise. The company announced a 7% dividend hike for 2024, as it looks for support to increase the CEO’s pay package by £1.8 million. This will bring Soriot’s total package to £18.7 million, including cash and the bonus part.
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AstraZeneca shares traded higher by 1.5% today as of writing.
AstraZeneca is a leading global pharmaceutical company, serving billions of people worldwide. The company operates in three main categories: Oncology, Rare Diseases, and BioPharmaceuticals.
AstraZeneca’s Dividend Hike
AstraZeneca stated that it will increase its dividends for 2024 by 20 cents to $3.10 per share. In 2023, the company maintained a total dividend payout of $2.90, unchanged from the previous year.
The board believes the dividend hike showcases its confidence in the company’s future performance and cash-generation capability. The board also reiterated its dedication to AstraZeneca’s progressive dividend policy.
The Dilemma of Soriot’s Pay Raise
Soriot is already one of Europe’s highest-paid pharmaceutical CEOs. However, shareholders remain divided on whether he merits a salary increase. Earlier in 2021, 40% of the shareholders voted against the proposed hike in Soriot’s pay. According to the proposed plan, Soriot’s annual incentive payments linked to long-term performance could potentially reach 850% of his nearly £1.5 million base salary, up from the 650% maximum level under the existing policy set in 2021.
The decision to raise the pay has been criticised by shareholder advisers, such as Glass Lewis, who think that the suggested salary hike is “excessive.” However, the proposal has gained support from certain big shareholders, such as Rajiv Jain from GOQ Partners (AU:GQG). Jain believes Soriot is currently “underpaid,” considering the company’s growth numbers.
The company will confirm whether the proposal to increase Soriot’s pay has been approved after its annual general meeting on Thursday.
What is the Target Price for AstraZeneca?
As per the consensus rating on TipRanks, AZN stock received a Moderate Buy rating, supported by 12 Buy, three Hold, and two Sell recommendations. The AstraZeneca share price forecast is 10,352.50p, which is 5% below the current level.
