Reckitt Benckiser boss Rakesh Kapoor has attempted to soothe investor concerns that he was driven to seal a $17.9bn (£14.2bn) takeover of Mead Johnson to ensure he hit lucrative bonus targets.
The maker of Cillit Bang, Nurofen and Durex condoms has sealed a $90-a-share takeover of the US baby milk maker, which will boost Reckitt's position in China, the US and Mexico.
Mr Kapoor said that the takeover fitted the company's consumer health strategy and would generate £200m of cost savings after three years, although it would take around five years to make a return on the deal.
However, analysts and investors have argued that Reckitt's takeover is an attempt to buy growth, following a softening in sales, and boost its earnings - to which Mr Kapoor's pay is directly linked.
Reckitt Benckiser posted a 1pc rise in fourth quarter like-for-like sales to £2.7n, below City forecasts of 1.7pc. Full-year operating profits were in line with analyst expectations at £2.7bn. Pre-tax profits for the year to the end of December lifted 8pc higher to £2.4bn.
The consumer goods boss warned that sales growth would be below expectations after its new line of Scholl pedicure tools failed to live up to expectations.
Mr Kapoor is the second best paid chief executive in the FTSE 100 and received £23m in pay last year. If the Reckitt boss lifts earnings per share by more than 10pc over the next three years he will be in line for share awards worth up to £15.4m.
Mr Kapoor defended his pay package by highlighting that Reckitt's shareholder returns had been three times higher than its rivals over the last five years. "This deal is not about buying growth," the Reckitt boss argued. "If you cannot grow a business organically then you will be found out in 12 to 18 month....My focus is on shareholder value, it is shareholder value that drives me."
In response to whether he should be entitled to his bonus after Reckitt's toxic disinfectant scandal in South Korea led to 93 deaths, Mr Kapoor replied said he had made "my point of view to the remuneration committee and it is for them to decide". He declined to say what his view had been although Mr Kapoor made a personal apology at the company's annual meeting last May. At that meeting 40pc of shareholders voted against his remuneration package.
Mr Kapoor said that Mead Johnson was a "trusted brand" that would fit with Reckitt Benckiser's "200-year history as the trusted maker of Dettol and other household products". He added that the Mead Johnson deal was "structurally attractive".
Mead Johnson had previously been tipped as a target for rival baby formula makers Danone and Nestle but the US company has agreed a $460m break-fee should the deal with Reckitt Benckiser collapse.
The US babymilk maker's growth has recently stalled after Chinese authorities clamped down on the 2,000 different formula brands available, prompted a surge in discounting. A number of Chinese mothers are also switching to breast feeding due to health concerns following a series of contaminated baby milk scandals.
Adrian Hennah, Reckitt's chief financial officer, said that Reckitt was confident in the long term strength of Mead Johnson and that it could grow its 12pc share of the Chinese market.