11th Apr 2024 10:08
(Alliance News) - AstraZeneca PLC on Thursday said it plans to increase its dividend by 7% in 2024, having left the payout flat last year, making the promise ahead of a key vote on its chief executive's pay.
Astra holds its annual general meeting in London on Thursday with the remuneration policy one of the items on the agenda.
"The main UK corporate news story today comes from pharmaceutical giant AstraZeneca, who have hiked their dividend by 7% on the same day as a key vote on leadership remuneration. Shareholders won't be blind to the fact that this is a barely disguised sweetener, but it may quell appetites enough to get the divisive package through," said Sophie Lund-Yates at Hargreaves Lansdown.
"The bigger picture for Astra still centres on the work it does on rarer and more complex treatments – dominating this area of the market takes very deep pockets, and that doesn't appear to be under threat."
AstraZeneca shares were 1.5% higher at 10,890.00 pence each on Thursday morning in London, the top riser in the FTSE 100 index, which was down 0.2% overall.
The Cambridge, England-based pharmaceutical company said the increase will be by 20 US cents to USD3.10 per share.
For 2023, AstraZeneca had paid a total dividend of USD2.90, which was unchanged from 2022, despite skyrocketing profit on the back of lower sales costs.
Chair Michel Demare said: "This uplift is in line with our progressive dividend policy, which remains unchanged, and reflects the continuing strength of AstraZeneca's investment proposition for shareholders."
In February, Astra had reported a surge in pretax profit for 2023 to USD6.90 billion from USD2.50 billion in 2022. Revenue edged up 3.3% to USD45.81 billion from USD44.35 billion, though Astra had noted a 21% jump in total revenue from oncology.
The sweetened dividend promise comes on the day of shareholders voting for its chief executive's pay.
Pascal Soriot has been CEO of the firm since October 2012.
"It's no coincidence that AstraZeneca has delivered shareholders some good news on the same day they are being asked to vote on a GBP1.8 million pay rise for chief executive Pascal Soriot," said AJ Bell's Russ Mould.
"Announcing a 7% hike in the dividend is clearly positive for shareholders, but are they being buttered up so their vote swings a certain way? At face value this looks like a 'something for you, something for Pascal, everyone's a winner' strategy.
"There has been a lot of debate about whether Soriot deserves an GBP18.7 million pay package. He's certainly delivered a lot of value for shareholders and presided over a major period of growth for the business – and no-one is denying that. The moot point is the scale of his remuneration."
By Sophie Rose, Alliance News senior reporter
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