USA – A group of institutional investors is urging companies to tie CEO pay to equitable access to the COVID vaccine.
Pay packages for CEOs at COVID vaccine makers Pfizer, Johnson & Johnson, Moderna and AstraZeneca should be tied to making their shots available around the globe, a group of institutional investors wrote in a letter to the companies’ boards, Reuters reports.
According to News wire, the investors want drugmakers to use a WHO roadmap for vaccine equity as a component in evaluating executive pay “in a meaningful, material, measurable, and transparent way.”
According to Reuters, the 65 investors manage a total of US$3.5 trillion in assets, but it’s unclear how much each of them owns in the four companies.
Participants include Achmea Investment Management, Nomura, Investec, Boston Common Asset Management, Candriam, GAM, Aegon, and PGGM.
Compensation for biopharma CEOs is typically measured against corporate financial goals, return on investment to shareholders, and clinical and regulatory development milestones.
From that vantage point, the successful development of COVID vaccines has all contributed to the 2020 pay packages of CEOs at Pfizer, J&J, Moderna, and AZ.
However, environmental, social, and governance (ESG) factors have begun to take their place in CEO pay reviews, as investors place a greater emphasis on these nonfinancial risk factors.
For example, in evaluating CEO Pascal Soriot’s 2020 annual bonus, AZ includes an ESG section that includes “access to healthcare.”
AstraZeneca, in collaboration with the Serum Institute of India, has been a driving force in providing COVID shots to low- and middle-income countries, owing to the vaccine’s less stringent storage requirements.
By the end of September, the two had delivered over 145 million doses of Vaxzevria to COVAX, a global vaccine distribution initiative that serves underserved areas.
The shot, also known as Covishield in India, is said to have accounted for 90% of the 1.3 billion doses administered in the country as of early December.
A shareholder proposal in J&J’s 2021 proxy filing requested that the company’s board report on how government financial support will affect access to the pharma giant’s COVID vaccines and therapeutics.
The J&J board of directors asked investors to vote against the proposal, citing the company’s commitment to provide up to 500 million vaccine doses to low-income countries.
Vaccine supplies to the LMICs
According to a company spokesperson, approximately 60% of J&J’s COVID vaccines were shipped to low- and middle-income countries by the end of 2021.
The company has agreed to ship 900 million doses of the vaccine to the African Union and COVAX by 2022. According to the spokesperson, it is also in final negotiations with South Africa’s Aspen Pharmacare to license the shot.
Pfizer, on the other hand, has pledged to deliver at least 1 billion doses of BioNTech-partnered Comirnaty to low- and middle-income countries each year through 2022. According to a Pfizer spokesperson, the two companies fulfilled their pledge in 2021.
In the case of Moderna, the biotech agreed to supply up to 150 million additional doses of its COVID shot to COVAX in 2022, on top of the 500 million doses it had agreed to supply in 2021 and 2022.
In addition, the company has a separate agreement to supply the African Union with 110 million doses.
Last year, Alex Gorsky, then-CEO of Johnson & Johnson, earned US$29.58 million in total 2020 pay, ranking third among his biopharma peers. Soriot received US$21.52 million from AZ, while Pfizer CEO Albert Bourla received US$21.03 million.
Moderna’s CEO Stephan Bancel received US$12.85 million for the COVID shot, the company’s only commercial product.