Shareholders revolt over Glaxo chief's pay

Drugs giant GlaxoSmithKline was today poised for what could be the biggest shareholder rebellion over “fat cat” pay ever seen in the UK.

An outright majority of shareholders will fail to back the company’s position in a vote over boardroom pay at its annual general meeting tomorrow, according to reports.

Even by the standards set in the current run of stormy company AGMs, it is thought that an actual majority refusing to back the board’s recommendation would be unprecedented.

England's National Association of Pension Funds has stopped short of calling for its members – who collectively own about one fifth of the entire stock market through their investments – to vote against.

A spokesman for the NAPF said the association had advised its members to abstain in the key vote on the company’s remuneration report which contains details of executives’ salaries and bonuses.

The NAPF is angry at a so-called “golden parachute” arrangement for the group’s chief executive Dr Jean-Pierre Garnier, which could hand him a sizeable package if he were forced out of the company, as well as generous pension arrangements.

Reports in the Mail on Sunday, Sunday Express and Sunday Telegraph in England claimed that early indications based on proxy votes already received from the big institutional shareholders point to a majority failing to back the board’s resolution.

The NAPF spokesman said that it did not receive feedback from individual members on how they intended to vote and could not predict the size of the rebellion.

But he added: “From what I have gathered there has clearly been one or two fairly sizeable protest votes.”

He said that as far as the NAPF was aware, no AGM resolution proposed by a company itself had ever been overturned in a vote.

While the vote on the group’s remuneration package is only advisory, an outright majority would be interpreted as an embarrassment for the company.