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Last updated: July 16, 2012 5:18 pm
The former chief executive of AstraZeneca has been awarded a severance package worth as much as £4.5m following his ousting by angry investors during the recent wave of shareholder discontent.
The Anglo-Swedish pharmaceuticals group on Monday said that David Brennan had received a £915,000 cash payment, as well as shares worth an estimated £1.5m from a 2010 executive bonus scheme.
Mr Brennan was also entitled to previously awarded shares and share options worth as much as £2m, calculated at the group’s stock price of about £29.
AstraZeneca’s remuneration committee decided that Mr Brennan, who was asked by the drugmaker’s board to take early retirement after a run of poor results, would forfeit cash and performance-related shares from its 2011 and 2012 bonus schemes worth as much as £3.5m.
“Mr Brennan informed the remuneration committee that he did not wish to be considered for a bonus in respect of that part of 2012 during which he was chief executive. The committee determined that no such bonus would be awarded,” AstraZeneca said.
Mr Brennan’s resignation was the first of several high-profile ejections of chief executives during a period of investor activism that included the departures of Andrew Moss from Aviva and Sly Bailey of Trinity Mirror.
Mr Brennan has worked for the group for 36 years, and has built up a pension pot with a transfer value of $23m, AstraZeneca said.
The former chief executive fell victim to pressure from leading investors, who had agitated for boardroom changes and greater cash returns rather than any new large-scale investment or acquisitions.
Mr Brennan was the third-highest paid chief executive of a FTSE 100 company in 2011, with a “total realisable remuneration” of £11.32m, according to an annual survey by Manifest, the proxy voting agency, and MM&K, a remuneration consultancy.
Concerns about the drugmaker’s strategic direction and first-quarter results that fell below City expectations encouraged a group of top shareholders to push Mr Brennan into his abrupt resignation in April, although he did not leave the group until June 1.
Investors agitated for change following the group’s failure to find replacements for blockbuster drugs that have lost their exclusivity patent protection.
This has been exacerbated by difficulties in AstraZeneca’s drug development pipeline and failures of experimental medicines during clinical trials, including a $382m writedown against the failure of two late-stage experimental medicines last year.
Mr Brennan was replaced on an interim basis by Simon Lowth, who moved across from the chief financial officer role, and is a favourite to take over the role permanently.
AstraZeneca shares edged up 6.5p to £29.43.
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