GSK sticks with Walmsley's salary in the face of investor griping, but she'll still net less than Witty

Emma Walmsley
Incoming Glaxo CEO Emma Walmsley will earn a pay package valued at 25% less than current chief Andrew Witty's.

Earlier this month, rumors swirled that some GlaxoSmithKline investors wanted incoming CEO Emma Walmsley’s base salary cut from the just-under-£1 million figure directors had floated. If so, those investors won't be too happy with what they find in the company’s annual report.

Released Tuesday, the report (PDF) lays out a base salary for Walmsley of £1,003,000—more than the £850,000 she’s been making since she was tapped in September as the company’s replacement for departing CEO Andrew Witty, but less than the £1.1 million Witty took home last year.

Some shareholders were griping about the company’s exec pay plans for Walmsley, claiming that the figures didn’t match Walmsley’s experience level, according to sources who spoke with Sky News. Walmsley, who will become Big Pharma’s first-ever female CEO when she takes the reins from Witty later this month, has spent her career in the consumer world, rather than prescription drugs. Most recently at Glaxo, she ran the company’s consumer health joint venture, and she spent 17 years at L’Oreal before joining the British pharma in 2010.

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Of course, Walmsley is not the only chief exec in the industry whose Big Pharma CEO job made for her first turn at the helm. AstraZeneca’s Pascal Soriot had never run a company before taking the drugmaker’s top job in October 2012, and his annual base salary rate that year hit £1.1 million. (Soriot also scored a special share award to make up for long-term incentive pay he lost when leaving his previous employer, Roche.)

Plus, while Walmsley’s base salary may only be 10% lower than Witty’s, her pay package will come in 25% lower overall than the £6.83 million he netted in 2016. One reason? Her pension benefit—a 20% of salary contribution to a defined plan, with a further 5% matched contribution on salary up to £33,333—is “significantly lower” than Witty’s arrangement, GSK said in its report.

RELATED: Investors press GlaxoSmithKline to slash incoming CEO Walmsley's pay package

She’ll also see a reduction of 20% in her total long-term incentive opportunity—down from a previous maximum of 700% of salary—and her target bonus will be brought to 100% of salary from the 125% Witty had. The latter tweak will help put the Glaxo CEO's bonus structure in line with its other executive directors' incentives, the company said.

That change and others come as the result of a 2016 review of GSK’s company remuneration policy, with the new rules designed to “simplify pay arrangements,” keep compensation arrangements consistent “across the senior layers of the organization,” and “drive the success of the company and the delivery of its business strategy,” remuneration committee chairman Urs Rohrer wrote in the annual report.

“The committee were particularly thoughtful about the quantum of the incentives and about how the new policy should be implemented for Emma Walmsley in 2017,” he said.

Exec pay is a touchy subject right now in Glaxo’s home country, with pressure piling on the government to close a widening wage-inequality gap. And U.K. CEOs already take home far less than their American counterparts, whose annual pay packages can top the $40 million mark.