GlaxoSmithKline plc (ADR) (NYSE:GSK) chief executive Sir Andrew Witty, has seen a sharp decline in his remuneration from last year, due to a decline in sales for Europe. The performance related bonuses were halved, from £5.7 million to £2.8 million. The overall pay of Sir Andrew was £3.9 million, down from £6.8 million in 2011. According to the annual report from GSK the annual bonus was £905,000, a decline from £2.0 million last year.
Remuneration of GlaxoSmithKline plc (ADR) (NYSE:GSK)’s R&D chief Moncef Slaoui declined 5.8 percent to £4.6 million last year. According to the annual report, 2012 was a very successful year for the research wing mentioning that R&D “exceeded the pipeline development and value targets for the year”.
Dr Slaoui was also complemented for designing and executing “a new integrated way of working between R&D and other parts of the business to create a strong, global product launch capability for GSK’s pipeline”.
According to Chairman of GlaxoSmithKline plc (ADR) (NYSE:GSK), Tom de Swaan, remuneration indicated a tough operating environment, primarily in Europe. The outlook for GSK is grim in Europe for the current fiscal. He further said that the management was able to deliver good sales performance in the emerging markets, consumer healthcare and other growth businesses.
Mr. de Swaan stated the current structure “strikes a good balance between motivating and retaining our executives while at the same time incentivizing them to deliver long-term sustainable returns to shareholders”.
As per the annual report of 2012 the executive can get up to 10.7 million pounds ($16 million), the condition being that all performance target are met, which would include a bonus two times his salary and a performance share plan worth six times the salary of CEO
A spokesman said: “Executive pay is based on stretching performance targets and awards in 2012 reflected these. Total pay fell by almost half compared to 2011, due to the difficult trading environment the group faced, particularly in Europe where governments implemented austerity measures.”
GlaxoSmithKline plc (ADR) (NYSE:GSK) paid $3 billion fine for settling the allegations that the pharma major mis-sold drugs and offered a trip to Bermuda to the Doctors who agreed to write additional prescriptions. The company, however, confirmed that the fine was related to a past matter, even before Andrew was CEO. The board gave its full support to resolve the matter and take the company forward.