British pharmaceutical firms “massively underpay” executives and are risking an exodus of talent to US rivals, one of the Government’s top vaccine advisers has warned in the wake of an investor backlash over pay plans at AstraZeneca.
Sir John Bell, the Government’s life sciences champion and a key figure in the UK’s jab rollout, said AstraZeneca had been “extraordinary” over the past year in developing a Covid-19 jab - but was rewarded with a shareholder revolt for its pains.
The Anglo-Swedish company was bruised by a rebellion this month from almost 40pc of shareholders who voted against a proposal to hike the maximum bonus it could pay to boss Pascal Soriot.
Sir John praised both Mr Soriot and Dame Emma Walmsley, chief executive of GlaxoSmithKline.
He said neither had been motivated by money during the Covid crisis, but added that relatively lower executive pay in the drugmaking industry is a problem that could hold Britain back.
Sir John said: “The risk of being outside the guidelines for executive pay is that it then becomes difficult to find new people to take those jobs because if they are really good, they can get a job somewhere else and get paid substantially more.”
This means the UK could struggle to “attract the best”, Sir John said, adding: “It’s in our best interests to have these companies led by the best people.”
Mr Soriot spoke out this weekend over the investor revolt, telling the Financial Times: “It was important to sort the policy out so we could attract talent to replace me, but also to recruit people on the [senior executive team].”
He was paid £15.4m last year, a figure which although high by FTSE 100 standards is still less than top executives can collect in America.
Estimates suggest Johnson and Johnson boss Alex Gorsky earned just under $30m (£21m) last year, while Stanley Erck of Novavax made around $48m.
GSK’s latest annual report shows that Dame Emma was paid just over £7m in 2020, down from £8.1m a year earlier. Her pay was slightly less than that of GSK’s chief scientific officer Dr Hal Barron, who was handed $11m (£7.8m).
In response to the backlash, AstraZeneca had said that the “world drastically changed in the last 12 months, and so did AstraZeneca”.