GSK trims Witty's bonus in face of China probe
|GSK CEO Andrew Witty|
It remains to be seen how much GlaxoSmithKline's ($GSK) China bribery scandal will cost the British pharma, but it has already cost CEO Andrew Witty up to $410,000 in potential bonus money, according to the company's annual report.
For 2013, Witty will receive a bonus of £1.88 million ($3.13 million) of a possible £2.12 million ($3.54 million), the company said. The ongoing investigation was one of many factors taken into account when determining the bonus sum.
"Both Sir Andrew and the board are mindful of the impact this issue has had on the reputation of the company," remuneration committee chairman Tom de Swaan said in a statement. "As a result, the bonuses awarded for 2013 were lower than they otherwise might have been."
Witty received a pay and bonus package worth a total of £6.5 million ($10.8 million), according to The Guardian.
Witty's bonus and Glaxo's reputation are not the only things that have suffered on account of the claims that the company used travel agencies to funnel $489 million in bribes to Chinese physicians and healthcare professionals. The probe took an 18% bite out of GSK's vaccine and pharmaceutical sales in the country for 2013, and emerging markets chief Abbas Hussein promised price cuts in China as part of the company's apology.
The pharma giant is also subject to penalties from China, the U.S. and the U.K.; last week, Britain's Serious Fraud Office said it had plans to prosecute or fine some companies for overseas bribery, with at least one law firm assuming GSK is among them.
But it's not all bad news, at least for Witty. As Bloomberg points out, he still went home with more than twice what he received in last year's bonus thanks to 6 regulatory approvals in 2013. Those include FDA green lights for Breo and Anoro, the potential respiratory blockbusters set to follow in Advair's giant footsteps.
"Andrew Witty's bonus reflects GSK's very strong performance in 2013, which included receiving the highest number of product approvals of any company, meeting the top end of our financial guidance and delivering the best total shareholder return since the formation of the company with more than 5 billion pounds returned to shareholders," GSK spokesman Simon Steel told the news service in an email.
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