Markets

Claim: AstraZeneca CEO Brennan's Pay Too High; Spends Too Much on Lobbying

By Jim Edwards

Updated on: April 17, 2009 / 6:23 AM EDT / MoneyWatch

British corporate governance watchdog group PIRC is urging AstraZeneca shareholders to vote against management's annual report and compensation plan because the company gives too much money to U.S. politicians and its top executives.

The move signals the difference between the U.S. and the U.K. on compensation for executives: In the U.K., there is more pressure for compensation to be linked to performance. In the U.S., there is a boardroom culture of pay-for-failure.

AstraZeneca contributed $815,838 this year to U.S. political parties and wants spend up to $250,000 more, PIRC said, according to Dow Jones Newswires. PIRC said:

We do not consider political donations to be an appropriate use of shareholders' funds. Therefore we recommend that shareholders oppose the company's report and accounts to express concern.

AZ brushed off the criticism, saying its political donations were appropriate.

AZ CEO David Brennan received compensation of $4.7 million in 2008, a 9 percent increase from 2007, PIRC said. That's a fairly average for U.S. pharma chiefs, many of whom received much larger compensation packages for running much smaller firms.

Top pharma executives in the U.S. were rewarded with pay increases last year despite being convicted of crimes (Medicis), presiding over product recalls (Noven), making massive losses (Medarex), and general "below-target performance" (Merck). See the story ladder below for BNET's previous coverage of pharma executive compensation.

PIRC has launched criticism at AZ -- and drawn blood -- before. Former director Percy Barnevik was forced to give back Â£37m of a Â£61m pension he awarded himself when he left his old company, engineering group ABB, to join AZ's board as chairman, following PIRC protests in 2002. He was one of three AZ directors linked to the powerful Wallenger family of investors.