Financial News

  • 11 June 2014, 13:43

Investors Seek AstraZeneca Talks With Varley

John Varley, the former chief executive of Barclays, will be thrust back into the City spotlight as investors seek assurances that AstraZeneca will link boardroom pay to targets used to rebuff a recent 69bn takeover bid.

Sky News understands that a number of big AstraZeneca shareholders have requested meetings with Mr Varley, who chairs the pharmaceuticals group's remuneration committee, to discuss a revised set of criteria for executives' long-term share awards.

The talks follow the collapse last month of Pfizer's 55-a-share offer for the British company, the board of which said it was unwilling to enter formal talks about a deal unless it was pitched at at least 58.85-a-share.

Investors including Legal & General Investment Management (LGIM) told AstraZeneca directors that they were keen for it to use both that figure and a $45bn long-term revenue target to determine pay awards.

In an interview with the Financial Times last week, however, Pascal Soriot, AstraZeneca's chief executive, suggested that such a connection would be "crude".

"Our long-term incentive programme is already aligned with growth targets and pipeline delivery. If the stock market goes up, you can get to the target relatively easily. If it goes down, it becomes very hard," he said.

Some investors were disappointed at AstraZeneca's rejection of Pfizer's final takeover proposal and are keen for the two companies to restart talks later in the year.

The meetings with Mr Varley will catapult the former Barclays chief into his most active City engagement since he left the bank in 2010.

A member of AstraZeneca's board since 2006, he has not taken on another prominent role since stepping down from Barclays other than a directorship of the mining group Rio Tinto.

Mr Varley is reportedly facing a Serious Fraud Office interview under caution in relation to the agency's inquiry into fees paid by the bank to Middle Eastern investors as Barclays sought to avoid a state bailout in 2009.

Under rules supervised by the City takeover watchdog, Pfizer is now effectively prohibited from making a further offer for AstraZeneca for six months.

However, the British group, which has sought to justify the rejection by setting out further details of its cancer drug pipeline, could approach Pfizer to enter talks in three months' time.

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