GlaxoSmithKline reviews remuneration

Drugs giant GlaxoSmithKline today said it was still reviewing its remuneration policy including controversial two-year rolling contracts awarded to executives which sparked a shareholder protest.

Earlier today, French-born chief executive Dr Garnier was reported to be ready to give up part of the £22m (€32m) “golden parachute” package he would have received if he lost his job.

The deal caused a storm at the pharmaceutical firm’s annual meeting in May, escalating a huge shareholder revolt .

Investors were angry about the package Dr Garnier could get and voted down the remuneration report in protest, making GSK the first company to suffer such humiliation.

Despite the vote being only advisory, GSK appointed City accountants Deloitte & Touche to review all aspects of its remuneration policy.

A spokesman for GSK said: “It is a process that is still ongoing. When completed, the review will be looked at by the remuneration committee.”

The company has argued it must keep executive pay in line with US pharmaceutical companies to attract and retain the best corporate talent.

Following the defeat at the annual meeting, GSK’s chairman Christopher Hogg said the board had registered shareholders’ sensitivity to the issue of remuneration and had “genuinely open minds” about the outcome of the review.

After the embarrassing vote, City analysts and shareholder groups predicted that GSK would eventually scrap the controversial two-year rolling contracts for executives and replace them with one-year deals.

Today’s report in the Daily Telegraph also suggested Dr Garnier may give up his rights to share options and long-term incentives.