A U.K. shareholder group is up in arms over Jean-Pierre Garnier's (photo) bonus. Sound like a broken record? Or like a news story from a time capsule circa, oh, 2003? Nope, it's today's story--and Garnier isn't even CEO of GlaxoSmithKline anymore.
Here's the scoop: Garnier's employment contract with Glaxo allowed him to cash in some company shares this year. The shareholder group, Pirc, calculates that the ex-chief could take in some $10.6 million off the vesting of shares awarded to him in early 2007, provided Glaxo meets certain performance targets this year. Pirc, a rabble-rousing shareholder activist organization, calls that unfair: "Why should he potentially benefit from the plan when for 18 months, he would not have been directly involved in running the company's affairs?" the group's Jonathan Kellar told The Guardian. So Pirc is urging shareholders to vote against this year's exec-comp in protest.
A Glaxo spokesman rebuts Pirc, saying the share-vesting was designed to reward Garnier for performance over a three-year period--and it doesn't matter that he's no longer running the company. He was there for half that three-year period, and that's plenty. "To vest at the level referenced by Pirc, GSK will have to deliver sector-leading performance and returns for shareholders," the spokesman says. "No major advisory groups have raised this as an issue for shareholders."
As you know, Garnier's pay has been the subject of angry shareholder debate before. In 2003, stockholders were up in arms over his "golden parachute," which the company ended up revising in response to the revolt. Will Glaxo shareholders respond to Pirc's prodding --and if so, will the company change anything? We'll have to wait and see.
- read the story in the Guardian