AstraZeneca bosses to leave after boardroom 'coup'

 
astrazeneca sign

In a very unusual move, the chief executive of AstraZeneca, David Brennan, and the chairman, Louis Schweitzer, are both retiring earlier than expected.

Sources tell me they were encouraged to go by the other non-executives, against the background of concerns from shareholders that the performance of the huge drug company has been disappointing.

"The board took the view we needed change, because of the urgency of implementing a new strategy; any hiatus would not have been right or acceptable," said a source close to the company. "It was difficult and painful. Forcing through this kind of thing is not easy."

It is the departure of Mr Brennan, who has held the reins for more than six years, which is more significant. The finance director, Simon Lowth, will replace him on an interim basis.

Mr Schweitzer is standing down three months before he was due to go, so that a new chairman - Leif Johansson - can begin the search for a permanent chief executive.

First quarter profits, also announced today, have fallen 38% to £1.3bn - and the group warned that profits in the year as a whole will be worse than expected.

"People will doubtless connect their departures with the first-quarter figures," said a source. "That's wrong. The board has been concerned for some time that we needed a new chief executive. We haven't reacted to one poor set of results".

The priority, I am told, is to improve the productivity of research and development, possibly by doing deals with other drug companies.

Leif Johansson, former chief executive of Volvo, will succeed Mr Schweitzer on 1 June. That will also be Mr Brennan's departure date.

 
Robert Peston Article written by Robert Peston Robert Peston Economics editor

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  • rate this
    +4

    Comment number 10.

    This story has made me think about the laws of incentives. Currently it is sticks for the poor and carrots for the rich. Let's reverse this and pay a generous bonus to those on JSA who find themselves a job and keep it for six months but deduct payments from directors who do not meet performance targets but who will be strongly 'incentivised' to succeed.

  • rate this
    0

    Comment number 9.

    Profits down 38% we are having a spot of trouble world wide with finance
    and countries nearly broke am I right ? so whats the problem ? very quick to forget the good years of massive profits and a share price to look at in wonder!! You can't have it all - all of the time .
    Was it J F K who said 'One thing is certain nothing is certain' ?
    More news about it please Robert when you can.

  • rate this
    0

    Comment number 8.

    "We haven't reacted to one poor set of results"

    There have been a number of poor results whilst the industry has been growing, that is why they had to go.

    AZ has just been collecting the rent on their existing patents which are starting to expire, spending large on promotion and advertising at the expense of sufficient spend on R&D.

    I imagine their parachutes are heavily gilded though.

  • rate this
    -1

    Comment number 7.

    "The priority, I am told, is to improve the productivity of research and development"

    .A euphemism for cracking the whip and placing everyone involved with research on notice that the research deadlines will be shortened and tests on new products not carried out to the same exacting standards.
    Look out for future recalls of products having undesirable side effects and litigation in the courts

  • rate this
    +7

    Comment number 6.

    "The priority, I am told, is to improve the productivity of research and development, possibly by doing deals with other drug companies."

    It'll have to be. They can't do it themselves:

    http://www.bbc.co.uk/news/uk-england-leicestershire-15982950

    1200 highly skilled staff. Gone.

  • rate this
    -1

    Comment number 5.

    Now now, Robert. Don't get distracted from the Murdochs by something as mundane as a business story.

  • rate this
    +1

    Comment number 4.

    Robert, you suggest these early departures are due to poor performance. The company says they were not motivated by poor results. It's days like this one realizes there IS a 5th dimension and it's where those elusive truths regarding human affairs reside.

  • rate this
    0

    Comment number 3.

    So much for needing to pay lots of money to attract talent then.

  • rate this
    +3

    Comment number 2.

    Better late than never. It is a shame that it is too late to save the British sites closed in an effort to prop up the share price. I hope there is a brighter future for AZ now.

  • rate this
    0

    Comment number 1.

    Well will we find out what reward for failure or poor performance these two characters will receive and will we ever know if the company carried out any performance capability procedure leading up to 'departure'. I doubt if we will see them listed for a future ET or queuing for their much deserved JSA entitlement.

 

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