AstraZeneca Hikes Annual Dividend By 7% Just Before Vote On Its CEO's Pay Package Boost

Zinger Key Points
  • AstraZeneca says dividend raise considers other capital allocation priorities, previously announced acquisitions and business development.
  • Shareholders will vote on a proposal to increase CEO Pascal Soriot's compensation by £1.8 million.

Thursday, AstraZeneca Plc AZN raised its annualized dividend for 2024 by $0.20 to $3.10 per share, underlining the company’s confidence in its performance and cash generation. 

The company said the 7% increase takes into account other capital allocation priorities and previously announced acquisitions and business development.

Michel Demaré, Chair, AstraZeneca, 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.”

Also Read: AstraZeneca CEO Highlights Decade-Long Sales Goal Of $45B Along With Investor Doubts As It Lags In Weight Loss Race.

Reuters noted the shareholders are gearing up to vote on a proposal during the annual general meeting that might increase CEO Pascal Soriot’s compensation by £1.8 million, potentially reaching £18.9 million in 2024. 

Influential proxy advisers Glass Lewis and ISS have recommended that shareholders oppose the policy.

AstraZeneca intends to maintain or increase the dividend each year as part of that dividend policy.

“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,” Reuters highlighted, citing Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown.

“The bigger picture for Astra still centers 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.”

Last month, AstraZeneca agreed to acquire Fusion Pharmaceuticals Inc FUSN for $21.00 per share in cash plus a non-transferable contingent value right (CVR) of $3.00 per share in cash payable upon the achievement of a specified regulatory milestone.

For fiscal year 2024, AstraZeneca says total revenues and core EPS are expected to increase by a low double-digit to low teens percentage at constant exchange rates.

Concurrently, the FDA approved AstraZeneca’s Faaenra (benralizumab) as an add-on maintenance treatment for patients with severe asthma aged 6 to 11 with an eosinophilic phenotype.

Fasenra was first approved in 2017 as an add-on maintenance for severe eosinophilic asthma in patients aged 12 and older.

Price Action: AZN shares are up 2.64% at $69.91 during the premarket session on the last check Thursday.

Photo via Wikimedia Commons

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