Eve Matthews
(Reuters) – Pharmaceutical company AstraZeneca (NASDAQ:) plans to raise its annual dividend by 7% through 2024, the company said on Thursday ahead of a shareholder vote on a significant pay raise for its CEO.
The company, listed as London’s second-largest market value, said it would pay a dividend of $3.10 per share this year, taking into account other capital allocation priorities as well as previously announced acquisitions and business development.
Meanwhile, shareholders are preparing to vote at the annual general meeting on a policy that could increase CEO Pascal Soriot’s salary by 1.8 million pounds ($2.26 million) to a maximum of 18.9 million pounds in 2024.
Influential trusted advisers Glass Lewis and ISS reportedly urged shareholders to vote against the policy.
“This increase is consistent with our progressive dividend policy, which remains unchanged and reflects the continued strength of AstraZeneca’s investment proposition for shareholders,” Chairman Michel Demare said in a statement.
AstraZeneca intends to maintain or increase its dividend each year as part of this dividend policy.
“Shareholders won’t be blind to the fact that this is a thinly disguised sweetener, but it could suppress appetites enough to push through a divisive package,” said Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown.
“The big picture for Astra remains focused on the work it is doing on rarer and more complex treatments – dominance in this area of the market is very costly and this does not appear to be under threat.”
The Anglo-Swedish drugmaker said it expects overall revenue and core earnings per share (EPS) to rise in the double digits to the low teens as a percentage this year.
The company’s shares are down 8.5% over the past 12 months. They rose 1.2% to £108.58 on Thursday.
($1 = 0.7971 pounds)