Sir Philip Hampton To Leave RBS, To Head GlaxoSmithKline

Sir Philip Hampton To Leave RBS, To Head GlaxoSmithKline
By Ian Wilson (Flickr) [CC BY 2.0 or CC BY 2.0], via Wikimedia Commons

Sir Philip will join the GlaxoSmithKline plc (ADR) (NYSE:GSK) (LON:GSK) board as a non-executive director in January, before becoming deputy chairman on April 1 2015 and ultimately replacing Sir Christopher Gent as chairman later in the year.

The move represents a switch between two of the most challenging posts in British business. After joining Royal Bank of Scotland Group plc (ADR) (NYSE:RBS) (LON:RBS) at the height of the financial crisis in 2009, Sir Philip will be tasked with improving the future prospects of GlaxoSmithKline plc (ADR) (NYSE:GSK) (LON:GSK), which has just been fined almost £300 million by Chinese authorities for bribery, as well releasing a profits warning just two months ago.

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A problematic succession

The departure of Sir Philip had been expected, but matters have been complicated by the fact that the bank is 81% owned by the UK government. The search for a successor will presumably increase in intensity following next May’s general election.

A source close to the affair claimed that “the government has put £46 billion into this company so it is bound to take a deep interest in the make-up of its senior management.” It is thought that Sir Philip will also want to know which party will form the next government before appointing a successor.

Rebuilding GlaxoSmithKline’s reputations

The bribery scandal of the past year has severely affected GlaxoSmithKline plc (ADR) (NYSE:GSK) (LON:GSK)’s operations in China, one of the fastest growing pharmaceutical markets in the world.

Mark Reilly, the former head of GSK’s operations in China, has been given a three-year suspended jail sentence by a Chinese court for bribing doctors to prescribe GSK products. Reilly is to be deported to the UK upon the completion of his trial.

Additionally, shares in GlaxoSmithKline plc (ADR) (NYSE:GSK) (LON:GSK) have suffered an 11% decrease in the past year, in contrast with a 14% rise in the pharmaceuticals sector as a whole. One of Sir Philip’s main tasks will be to offset the decline in best-selling asthma drug Advair with new sources of growth.

Although Sir Philip trained as a chartered accountant and has no experience in the field of life sciences, a source claimed that he is a top candidate for the job because of his time in the “highly regulated, high-risk” financial sector.

Updated on

While studying economics, Brendan found himself comfortably falling down the rabbit hole of restaurant work, ultimately opening a consulting business and working as a private wine buyer. On a whim, he moved to China, and in his first week following a triumphant pub quiz victory, he found himself bleeding on the floor based on his arrogance. The same man who put him there offered him a job lecturing for the University of Wales in various sister universities throughout the Middle Kingdom. While primarily lecturing in descriptive and comparative statistics, Brendan simultaneously earned an Msc in Banking and International Finance from the University of Wales-Bangor. He's presently doing something he hates, respecting French people. Well, two, his wife and her mother in the lovely town of Antigua, Guatemala. <i>To contact Brendan or give him an exclusive, please contact him at [email protected]</i>
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