Investors push Glaxo to slash incoming CEO’s comp
As incoming GlaxoSmithKline CEO Emma Walmsley gets ready to move into the company’s top spot, shareholders have some objections—and they center on her pay package.
Leading investors of the company are pressuring Glaxo’s board to pare down Walmsley’s prospective compensation. Their reasoning? It’s insufficiently lower than current chief Andrew Witty’s, Sky News reports.
According to the news service, Urs Rohner, chair of GSK’s remuneration committee, has floated a package that would grant Walmsley an annual base salary of just under £1 million—more than the £850,000 she’s been making since she was tapped last year as the company’s next leader, but slightly less than the annual £1.1 million Witty pockets each year.
Walmsley’s bonus and long-term share award potential—where pharma CEOs usually net the bulk of their compensation—would also be far less than Witty’s, sources told Sky.
Some shareholders still don’t think the figures fit Walmsley’s experience level. The future skipper, set to become Big Pharma’s first female CEO, has a resume heavily weighted toward consumer products; most recently, she ran Glaxo’s consumer health joint venture, and before joining the British drugmaker in 2010 she spent 17 years at L’Oreal.
For now, final compensation proposals haven’t been submitted, but time is running low: Glaxo’s annual report, which will include the details of Walmsley’s pay package, is due out in the latter half of this month.
The company is in “active consultations with shareholders” and is “acutely aware of the need for a balanced and responsible approach to remuneration,” a spokesperson said in a statement.
The executive pay landscape is particularly tense in the U.K. right now, with pressure on the government to close a widening wage-inequality gap. Some have called for companies to reveal more data about exec pay—including a breakdown of how much more their CEOs earn than the average worker—but Glaxo and British peer AstraZeneca last month told Bloomberg they wouldn’t.
Regardless of how much Walmsley’s package ends up totaling, the final figures will still pale in comparison to those of her U.S. counterparts. In 2015, one of biopharma’s top-paid execs—Regeneron CEO Len Schleifer—came away with $47.5 million, more than five times the £6.66 million ($8.15 million) Witty earned overall in 2015.
AstraZeneca has also faced pushback regarding its CEO pay. In 2012, the £4 million it awarded newcomer Pascal Soriot, meant to make up for a loss of long-term incentive compensation from previous employer Roche, sparked investor outcry.