Components of remuneration

Component of remuneration	Role within the remuneration framework	Summary of Policy	Applies to
Base salary (fixed)	Base fixed remuneration.	Based on conditions in the relevant geographic market and recognising the value of an individual's sustained personal performance and contribution to the business, taking account of the market rate for an individual's skills and experience. Benchmarked against external comparators.	All employees
Pension arrangements (fixed)	Provision of retirement benefits.	Benchmarked against the relevant local employment market.	All employees
Benefits (fixed)	Provision of standard non-cash employment benefits, such as healthcare, insurances and, for certain employees, facilitated car purchase arrangements.	Cost-effective and compatible with relevant welfare arrangements and local market norms.	All employees
Short-term bonus (variable)	An annual cash incentive opportunity determined by reference to Group, functional and individual performance, measured over a single financial year of the Company and taking into account external expectations of performance.	Differs by market, but the Group performance measures ensure that all eligible employees receive an element of reward based on the Company's overall financial performance. The functional goals are agreed by the Committee at the start of the year and are derived from the business scorecard, the key elements of which are set out in the Strategy, objectives and 2009 performance table, and are monitored as part of the quarterly business review (QBR) process. Individual goals are based on annual objectives, which are linked to functional goals.	All eligible employees
Deferred bonus plan (variable)	Aligns SET members' interests with those of shareholders.	SET members must defer a proportion of their short-term bonus (currently one-third of pre-tax bonus for Executive Directors and one-sixth for other SET members) into Ordinary Shares or ADSs for a three-year period.	SET members
LTI plans (variable) - for more information on these plans see the LTI plans section	Long-term equity incentive awards to provide individual executives and employees with total compensation opportunities that are competitive against local market practice, for the achievement of operational excellence, strong financial performance and actions that are closely aligned with the interests of shareholders. Subject to shareholder approval, the primary LTI plans in which SET members participate from 2010 will be the PSP and the AZIP.	AstraZeneca Performance Share Plan.	SET members and other senior executives
		AstraZeneca Investment Plan (from 2010, subject to shareholder approval).	SET members
		Share Option Plan (final awards made in 2009).	Senior management and SET members
		Global Restricted Share Plan (from 2010, replacing existing restricted stock unit plans).	Eligible employees globally
Other share plans	'All employee' share participation arrangements, including some that are tax-approved, for example in the UK.	Examples include the Share Incentive Plan and Savings-Related Share Option Plan (UK)¹.	Eligible employees
Shareholding guidelines	Aligning SET members' interests with those of shareholders.	The current expectation is for SET members to hold shares with a value equivalent to their base salary. From 2010, the CEO will be expected to hold shares equivalent to 200% of base salary and the CFO and other SET members will be expected to hold 125% of base salary in shares.	SET members
Overall approach	When assessing the overall value of a SET member's remuneration the Committee considers, both separately and in aggregate, each component of the SET member's total remuneration.

¹: Further information on these plans is provided in Note 24 to the Financial Statements.

2010 proposed components of SET remuneration

2009 components of remuneration

During 2009, the remuneration components for all Group employees (including those of SET members) comprised fixed and variable performance-related elements. Summaries of these elements are included in the table on this page.

The way in which these elements of remuneration are combined and applied varies according to a range of factors, including specific business needs and practices in different markets, although, in general, the more senior the role within the business, the greater the proportion of total remuneration is made up of variable performance-related elements. The Committee seeks to ensure that the overall proportion of variable pay to which Executive Directors and other SET members may become entitled forms a significant part of their overall remuneration opportunity. The Committee's objective for senior management 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 its shareholders. Such measures are designed to stretch and challenge the relevant individuals whilst at the same time giving them an opportunity to participate as shareholders in the creation of long-term economic value.

The Company has continued to take into account the wider business environment and employment conditions across the Group. In particular, no base pay increases were awarded in respect of the 2009 calendar year to Executive Directors or other SET members whose responsibilities were unchanged. In addition, award opportunities under the Group's LTI plan framework have been held at a consistent level since the adoption of the PSP in 2005.

For 2010, the Company will continue to benchmark against appropriate comparator companies and will assess whether or not and to what extent the overall opportunities for remuneration offered by the current structure of remuneration remain appropriate in the context of changes within the business and the external environment in which it operates.