Glaxo to pay first woman CEO less
LONDON: Emma Walmsley, poised to take over as the first female chief executive officer (CEO) of GlaxoSmithKline Plc, will earn about a quarter less than her predecessor Andrew Witty to reflect her lack of experience at the helm.
Walmsley would be paid an annual base salary of about £1 million (RM5.41 million), said the drugmaker in its annual report.
That compares with Witty’s pay of £1.15 million last year. Her targeted bonus doesn’t exceed her salary, whereas Witty was given the opportunity to collect 125 per cent of his pay through the bonus.
The lower compensation, for a woman who is breaking the gender barrier to become the first female to manage one of the world’s top 25 pharmaceutical companies, is likely to re-ignite a debate on the pay gap between the sexes. But it isn’t unusual that compensation levels change when a new CEO takes office as boards seek to link pay packages to the person’s level of experience and tenure.
“This is the moment to reassess the executive pay structure,” said Stefan Stern, director of the High Pay Centre, a think tank on top United Kingdom executive remuneration. “It’s good to focus on the contribution from the new person and it’s good to be tough and pay somebody less than their predecessor if their curriculum vitae is at a different stage.”
Witty, who was also initially paid less than his predecessor, would have been CEO at Glaxo for almost a decade when he leaves at the end of the month.
Glaxo chairman Phil Hampton, who as director at Anglo American Plc oversaw the capping of executives’ bonuses there, also heads a government-backed review on how to increase the number of female executives at the UK’s 350 biggest companies.
Pascal Soriot, who heads smaller British drugmaker AstraZeneca, received a 2.5 per cent bump in his salary to £1.22 million this year, and can earn up to 180 per cent of his base pay as a bonus.
He also gets long-term incentives that could be as much as 500 per cent of his salary, compared with 550 per cent for Walmsley. Bloomberg