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

Garnier hangs up on BBC interview

Tracy Staton — Tue, 20 May 2008 10:18:18 -0400

The British press is abuzz today with the fact that outgoing GlaxoSmithKline CEO Jean-Pierre Garnier abruptly ended a BBC interview when it turned adversarial. Apparently, Garnier agreed to appear on the program to talk about GSK's new pandemic flu vaccine, Prepandrix. But host James Naughtie deviated from the subject, asking about the recent dust-up over Seroxat (Paxil). Garnier got increasingly agitated as Naughtie repeated the same queston--seven times!--then politely cut off the interview and hung up.

You'll recall that the U.K. government had been investigating GSK's handling of data about potential Seroxat safety problems in children; though investigators concluded the company hadn't broken the law, they said the real problem was that the law wasn't stringent enough, and scolded GSK for withholding data.

- read the item at The Guardian's TV and radio blog
- see the story in The Times
- get more from The Herald

Jean Pierre Garnier

GSK investors attack exec pay, performance

Garnier hangs up on BBC interview