June 1, 2012 a big change took place at AstraZeneca, a major drug manufacturer, as the top dog, the Chief Executive Officer David Brennan “retired” after only 6 years on the job.
The retirement apparently comes as no big surprise however, as news reports claim that the former chief executive fell victim to pressure from leading investors, who had agitated for boardroom changes and greater cash returns rather than any new large-scale investment or acquisitions at the FTSE 100 company.
First-quarter results that showed a significant 36% profit loss, which fell below expectations and concerns about looming patent expires and price cuts encouraged a group of top shareholders to push Mr. Brennan into his abrupt resignation in April, although he did not officially leave the group until June 1.
AstraZeneca and Brennan both say his departure was voluntary. Mr Brennan said that the decision was “totally” his own. “I’d been considering it for a while and given what we’d accomplished in the six-plus years I’d been in the role, it was time to give somebody the chance to take the company to the next level. It was my decision,” he said.
In the latest news, it was just announced exactly how much Mr. Brennan’s severance package would be worth. As the company announced, the former CEO would not receive a bonus for the first five months of 2012, in line with his wishes, following his abrupt exit after disappointing sales and repeated setbacks to its drugs pipeline.
Brennan, who had been with the British drugs company for 36 years, did however; receive a lump sum of 914,122 pounds ($1.4 million) in lieu of notice, representing 11 months’ pay, the company said.
Brennan said he’d relinquish his 2012 bonus completely, and the board didn’t argue. “Mr Brennan informed the Remuneration Committee that he did not wish to be considered for a bonus in respect of that part of 2012 during which he was Chief Executive Officer,” the company said in a statement. “The Committee determined that no such bonus would be awarded.”
AstraZeneca also said share awards made to Brennan in 2011 and 2012 under the AstraZeneca Performance Share Plan and the AstraZeneca Investment Plan should be forfeited.
But, Mr. Brennan is definitely not leaving empty handed.
According to AstraZeneca, Brennan did walk away with the £915,000 in cash ($1.4 million), plus shares worth £1.5 million ($2.33 million) from his 2010 incentive plan. And, he could earn more shares if certain 2010 goals are met. And then there’s his pension, built up over 36 years with the company; it has a transfer value of $23 million, AstraZeneca said.
So the grand total? A whopping $26.7 million, with an additional $3.1 million in stock if those 2010 incentive goals are met going forward.
Sounds like a pretty good chunk of change, if you ask me.
Mr. Brennan’s resignation was the first of several high profile ejections of chief executives during a period of investor activism, which included the departures of Andrew Moss from Aviva and Sly Bailey of Trinity Mirror.