AstraZeneca has told its former chief executive David Brennan he will have to forfeit his share bonuses for 2011 and 2012 as part of a retirement settlement.
But he remains inline for a multi-million pound payout that includes a lump sum payment of £914,122, the equivalent of 11 months' base pay, in lieu of contractual notice, and a pension pot worth £14.8m.
Brennan's unexpected announcement earlier this year that he would be stepping down came on the same day that the company revealed first quarter profit figures had dropped by 26 per cent.
Before the announcement Brennan had been under sustained pressure from shareholders for failing to address AZ's decline in market performance.
The company's problems were fuelled mainly by patent expiries for several key drugs, including its antipsychotic treatment Seroquel and a series of stalled drug development efforts for ovarian cancer, depression and respiratory syncytial virus.
Brennan officially relinquished his responsibilities as chief executive and an executive director on June 1, after six years as the head of the pharma company, and AZ has now released details of his retirement settlement.
As part of this he has been told he will have to give up share awards worth around £4.3m that were made in 2011 and 2012 under the AstraZeneca Performance Share Plan and the AstraZeneca Investment Plan, and he has also voluntarily opted out of one other potential bonus.
“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 Committee determined that no such bonus would be awarded,” AstraZeneca said in a statement.
The Committee also decided not to give him a bonus for his 11-month contractual notice period, however he will still be inline for share awards based on the company's 2010 performance worth an estimated £1.5m.
Brennan took over as chief executive at the end of 2005 from Tom McKillop who not only kept his shares but was also given a short-term performance-related bonus of £1.3m as part of his retirement payoff.