AstraZeneca Annual Report and Form 20-F Information 2008

AstraZeneca's overall remuneration policy and purpose

1. The role of the Remuneration Committee is to help the organisation to create value for shareholders over time through the development and deployment of remuneration policies and practices that support the implementation of the business strategy.
2. The Board is committed to maintaining a dynamic performance culture, in which the Group can compete strongly by employing and developing the best talent, and where every employee is clear about the Group’s objectives, how their work will impact on those objectives and how they will benefit from achieving high levels of performance.
3. To underpin these objectives, in addition to fixed remuneration which comprises basic pay, pension, and certain other benefits and which is benchmarked against appropriate external comparators, the majority of employees are eligible to receive an annual cash incentive. This incentive is determined by reference to corporate, team and individual performance. The component based on corporate financial performance is in the form of EPS. Whilst details of bonus plans differ from country to country, the EPS component ensures that all eligible employees receive an element of reward based on the Company’s overall financial performance. In addition, LTI awards are provided to selected senior employees in order to align their interests closely with those of the Company’s shareholders.
4. Pay for performance principles apply throughout the Group and provide a consistent framework within which executive remuneration decisions are made.
5. The Remuneration Committee has responsibility for determining the individual compensation paid to the Chief Executive Officer and members of the SET; and for the approval of any single payment or award over $1,000,000.
6. The Remuneration Committee seeks to ensure that the overall proportion of variable pay (bonuses and share-based awards) to which Directors and members of the SET may become entitled form a significant part of their overall remuneration opportunity. The Remuneration Committee’s objective is to ensure that such variable pay is linked to a range of measures designed to promote both individual and team behaviour and performance in a way that supports the success of AstraZeneca and creates value for shareholders. Such measures are designed to be stretching and challenging to the relevant individuals.
7. The Group’s overall remuneration policy and purpose is to:
   • Attract and retain people of the quality necessary to sustain AstraZeneca as one of the best pharmaceutical companies in the world.
   • Enable AstraZeneca to employ the best people and to develop the best talent by recognising and rewarding superior performance.
   • Motivate these people in order to achieve the level of performance necessary to create sustained growth in shareholder value through time.
   • Align the interests of employees with those of shareholders.
   • Align individual and team reward with business performance at each level.
   • Encourage employees to perform to their fullest capacity.
   • Create pay structures that are fair, equitable and internally consistent.
   • Ensure that pay structures are both competitive and cost effective in each of the relevant employment markets.
   • Ensure proper balance of fixed and variable performance-related pay.

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