THE departing boss of AstraZeneca will reportedly enjoy a "golden goodbye" worth up to £40m, despite leaving the pharmaceuticals giant with concerns over the development of new drugs.
Chief executive David Brennan last week announced he will step down in June after slashing full-year profits hopes and coming under fire for not acting sooner to tackle a shortage of blockbuster drugs as patents expire.
Despite the criticism, the Sunday Times said he is due to receive a pension of nearly £1m a year which, combined with other performance-linked payouts, could take his exit package to £40 million. As well as his pension pot, which an independent expert told the newspaper would cost £18 million to buy from an insurance company, he has already accrued £8.2 million of shares, £2 million of stock options, and could receive more shares in coming months.
Since Mr Brennan took charge in 2006, Astra’s shares have fallen 6% and investors have become increasingly concerned over his stewardship.
His potential package is likely to fuel the debate over excessive rewards for underperforming executives, the newspaper said.
Business Secretary Vince Cable has vowed to crack down on executive pay but plans to empower shareholders will not happen until autumn.
The UK’s second biggest drugs maker has struggled in recent months after it lost patent cover on antipsychotic drug Seroquel, and tests on ovarian cancer drug Olaparib proved it to be ineffective.
Results for the first three months of the year blamed a “loss of exclusivity“ for a 38% decline in pre-tax profits to $2.1bn (£1.3bn) and an 11% drop in revenues to $7.3bn (£4.5bn). The group lowered its target for full-year earnings per share. Astra’s so-called “patent cliff” – when revenues drop off as patents expire – is particularly steep as breast cancer drug Arimidex has already lost patent protection, while acid reflux treatment Nexium and biggest seller Crestor will lose patent protection in the next four years.
Elsewhere, some analysts are concerned that sales of its new blood-thinning drug, Brilinta, are not ramping up quickly enough.
A spokesman for AstraZeneca said: “David Brennan’s pension reflects the fact that he has been at the company for 36 years at increasingly senior positions. The final payout he will receive will be determined by the remuneration committee applying performance criteria during that period.”