GlaxoSmithKline CEO Walmsley snags a pay bump but still earns less than male peers

After pulling off a few large transactions, GlaxoSmithKline chief Emma Walmsley, the only female Big Pharma CEO, saw her pay package swell in 2018. But it’s still merely about half the size of what compatriot drugmaker AstraZeneca helmsman Pascal Soriot made.

Walmsley chalked up £5.89 million ($7.75 million) in 2018, up about £1 million from what she earned in 2017, her first year on the top job, according to the company’s 2018 annual report (PDF). That number includes £1.03 million in base salary, a slight uptick from 2017. The major increase—nearly £1 million—comes from performance-related pay, which includes annual bonus and share awards.

Kudos to Walmsley. But the paycheck wasn’t so impressive when compared in parallel with her peers.

Walmsley’s pay is low across industries in the U.K. and Europe. And the gap is even wider with other CEOs in global pharma—in fact, a couple million pounds away from even the lower quartile, according to GSK’s own tally—given that U.K. CEOs generally earn less than their American counterparts.

Walmsley's pay package was several million pounds smaller than
even the lower quartile of the global pharma CEO group. (GSK)

But take also-Britain-based AstraZeneca for example. Pascal Soriot, AZ’s CEO since 2012 and previously a top executive at Roche, netted £11.36 million in total pay last year, almost twice as much as what Walmsley made. And that’s someone who has publicly complained about being one of the lowest-paid CEOs in the whole industry.

Within GSK, Walmsley’s total pay fell short of Hal Barron's, the new R&D chief and a longtime Roche veteran she installed in early 2018 amid a huge management shakeup. Barron racked up £6.56 million in 2018, as his fixed pay—including salary, employee benefits and pension—was more than £2 million bigger than Walmsley’s. As Barron is based in San Francisco, he adopts U.S.-style benefit plans, versus others’ U.K. package.

In comparison, Andrew Witty, the GSK helmsman before Walmsley, got £6.83 million in 2016, the ninth year he was on the job.

Walmsley actually hit big on some 2018 goals, amassing nearly the maximum bonus possible available under GSK’s policy.

GSK executives’ annual bonus was tied 70% to the group’s financial performance and 30% to individual objectives. For 2018, GSK’s group adjusted PBIT—a composite financial measure—reached £8.75 million, beating its target by about 4%. The PBIT metric encompasses group sales, operating profit and operating margin, which all came in higher compared with 2017 at constant exchange rates.

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Under Walmsley, GSK made a string of deals in 2018. It acquired full ownership of a Novartis consumer healthcare joint venture and then reached a deal to combine the business with Pfizer’s OTC portfolio with the intention to eventually spin off the unit.

“Incremental cashflows and visibility of the intended separation will help support GSK’s future capital planning and further investment in our pharmaceuticals pipeline,” Walmsley said at the time.

Smart prioritization of GSK’s resources was deemed a plus on Walmsley’s bonus scorecard. With a $5.1 billion deal to acquire Tesaro and a potential $4.2 billion immuno-oncology pact with Merck KGaA, Walmsley has rekindled GSK’s interest in oncology and doubled the company’s clinical oncology programs to 16. GSK also invested $300 million in 23andMe for a partnership that aims to leverage genetic data to accelerate drug R&D.

Besides adding Barron to her executive team, Walmsley also found former HSBC executive Iain Mackay to replace outgoing CFO Simon Dingemans, who made £5.2 million last year. As GSK noted, about 69% of the top 125 leaders in the company were new to their roles, and the company achieved diversity target of 33% women at the senior VP and the VP level.