David Stout

GSK investors attack exec pay, performance

Tracy Staton — Thu, 22 May 2008 10:47:37 -0400

It's been a tough week for outgoing GlaxoSmithKline CEO Jean-Pierre Garnier. Browbeaten during a BBC interview on Tuesday, he was "heckled" by annoyed shareholders at yesterday's annual meeting. Investors complained about the stock's lackluster performance and rebelled against what they called excessive executive pay. At least Garnier's pain was shared by the company's board: "I am getting fed up with this underperformance," one shareholder said to applause. "This board is a continuing failure."

One paycheck at issue was Chris Viehbacher's one-time retention bonus, a stock award worth between $4 million and $5 million. Viehbacher, you'll recall, was in the running to replace Garnier, but lost out to incoming chief Andrew Witty. One of GSK's big investors questioned the bonus, saying it had "insufficient justification." (It's worth noting, however, that the other CEO hopeful, David Stout, left GSK after Witty was appointed.)

Investors criticized other exec's pay, too, saying it's not sufficiently linked to the company's stock performance. Only 61 percent of shareholders voted in favor; considering the usual rubber-stamp shareholder vote, that's a low percentage. Last year, GSK's pay plan got 92.5 percent of the vote.

Perhaps Garnier was simply taking out his frustrations on a handy target when he scoffed at the idea of GSK buying rival AstraZeneca. "What kind of future do they have?" he asked. "What kind of pipeline do they have? Why would you trade down?"

- see the story in the Financial Times
- check out the article in The Telegraph
- read the item in the Wall Street Journal Deal Blog
- get the Pharmalot take
- find the WSJ Health Blog item

Musical chairs at GSK leaves Stout out

Fri, 07 Dec 2007 06:59:58 -0500

You can take your $4 million and keep it. David Stout (photo), GlaxoSmithKline's president of pharmaceutical operations, evidently wants no part of the reported $4 million incentive package he was offered after being passed up for the top job. The company reported this morning that he's on the way out, while another frustrated candidate, Chris Viehbacher (photo), president of U.S. pharmaceuticals, joins the board. No word yet on where Stout may land. Andrew Witty (photo), new chief, also took his place on the board. And Eddie Gray, currently senior vice president and general manager pharmaceuticals UK, will succeed Witty as president, pharmaceuticals Europe.

- check out the release on the executive moves

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GSK runners-up get $4M, board seat

Mon, 03 Dec 2007 06:59:58 -0500

So GlaxoSmithKline's dynamic duo is worth $4.1 million each. The two execs passed over for the CEO job--Chris Viehbacher (photo), president of the company's U.S. pharma business; and David Stout (photo), president of pharmaceutical operations--will each get a retention package worth that much if shareholders approve. Most of the package will come in the form of stock options over the next two to three years, with a small amount up front in cash.

You'll recall that, while deciding whom to appoint as its next chief exec, Glaxo put Viehbacher, Stout, and then-European president of pharma Andrew Witty (photo) through their paces. The board chose Witty as CEO-designate, of course, and immediately investors began to worry that Viehbacher and Stout would jump ship, taking their considerable expertise with them. What better way to assure their loyalty than a staged payoff, plus a big say-so on the board?

- read the report from The Telegraph

Related Articles:
GSK CEO also-rans may get on board. Report
At GSK, a public race for the top spot. Report
Just who is Glaxo's Andrew Witty? Report
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GSK CEO also-rans may get on board

Tue, 16 Oct 2007 06:59:58 -0400

Last week, the buzz about GlaxoSmithKline's CEO-presumptive Andrew Witty included worries that his internal competitors for the top slot would jump ship. Now Glaxo may sweeten the pot for those also-rans--by putting them on the board of directors.

The move would benefit Glaxo two ways: One, it might induce David Stout and Chris Viehbacher--both experienced execs--to stick around. Two, it would increase the proportion of execs to non-execs on the board; now, only three of the 14 directors are company types.

Meanwhile, there's talk in the executive suite about other ways to retain the two men. More responsibility, perhaps. More money, too. But as nothing has been decided yet, Glaxo's only official word is "no comment."

- check out the Financial Times report

Related Articles:
Just who is Glaxo's Andrew Witty? Report
GSK taps Witty as next CEO. Report
At GSK, a public race for the top spot. Report
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