Glaxo chief loses half his incentive pay, cutting total to $5.86M

Sir Andrew Witty

GlaxoSmithKline CEO Andrew Witty--and his colleagues--have another reason to lament European austerity. Their bonuses and long-term incentive pay dropped, by half in Witty's case, as a "very challenging operating environment" hampered the company's performance.

According to GSK's ($GSK) new annual report, Witty's performance-based pay totaled £2.81 million for 2012, down from £5.743 million in 2011. (That's about $4.24 million and $8.6 million, respectively, at today's exchange rates.) His total compensation came in at £3.89 million, down from £6.78 million. In dollars, Witty's 2012 compensation amounted to about $5.86 million.

CFO Simon Dingemans suffered a somewhat smaller decline, partly because he earned only half of his maximum incentive pay in 2011. For 2012, his performance plan yielded £343,000, or 29% of his possible award, down from £827,000 and 50%.

R&D chief Moncef Slaoui also lost proportionately less. Thanks to the research group's "very successful year," his 2012 performance pay came in at $3.09 million, down from $3.5 million in 2011, as he qualified for 67% of his possible performance-pay max compared with 72%, respectively. (Witty's performance pay for 2012 stood at 72%, compared with 85% in 2011, a 13-percentage-point difference.) Slaoui's compensation for the year: $4.61 million.

No one in the GSK ranks is likely to shed a tear for Witty's declining pay, of course. It's still several millions more than their own paychecks. But the numbers are conspicuously low in Big Pharma, where the highest-paid executives routinely take in $20 million-plus every year--and ex-Novartis Chairman Daniel Vasella almost nabbed a non-compete agreement that would have given him more than $12 million a year for 5 years.

Editor's note: A previous version of this story quoted Slaoui's compensation in British pounds, with a total of £4.61 million. The correct amount is $4.61 million, almost $1 million less than Witty's total.

- get the GSK annual report (PDF)
- read the PharmaTimes story

Special Reports: Who's missing from the CEO pay list? Short answer: Europeans | Sir Andrew Witty - The 25 most influential people in biopharma today

Related Articles:
Enthralled with pipeline, GSK's Witty targets £1B in annual cost cuts
Board, Vasella slammed for handling of retirement prize
Ex-AstraZeneca chief forfeits up to £3.5M in exit pay
How does pharma's CEO pay rank?