GlaxoSmithKline failed to hit a key internal profit goal in 2020, due in large part to the impact of the COVID-19 pandemic. As a result, Chief Executive Officer Emma Walmsley took a nearly $2 million hit to her annual compensation.
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GlaxoSmithKline failed to hit a key internal profit goal in 2020, due in large part to the impact of the COVID-19 pandemic. As a result, Chief Executive Officer Emma Walmsley took a nearly $2 million hit to her annual compensation.
First reported by FiercePharma, Walmsley’s 2020 annual total compensation fell to £7 million, about $9.7 million. That was down from approximately £8.1 million ($11.25 million) in 2019. Part of Walmsley’s compensation is tied to company performance, which included that internal profit goal. Her base salary did see a slight increase to £1.199 million from £1.110 million in 2019.
Writing in the company’s annual report, Urs Rohner, chairman of GSK’s executive pay committee, noted the company hit its financial guidance, but “just missed” its internal profit goal.
“In terms of overall performance, management just missed the agreed internal budget target for biopharma primarily due to significantly lower than expected vaccines sales volumes as a result of COVID-19 pandemic disruption and lockdowns,” Rohner wrote in the report.
With a global pandemic, fewer people risked visiting the doctor’s office, which meant fewer people received the vaccines developed by the company. GSK said its vaccine business dropped 2%. Vaccine sales that were particularly hard-hit were the company’s Hepatitis vaccines, DTPa-containing vaccines, Synflorix and Bexsero. GSK did note higher sales of its flu vaccines across the globe, and continued growth of its shingles vaccine, Shingrix, in Europe, China and the United States. In all, Shingrix posted £2 billion (about $2.78 billion) in sales for the year.
Rohner noted that growth drivers for the company were products in its new and specialty medicines business related to respiratory disease, HIV and oncology. Sales were £9.7 billion, up 12%.
Despite missing that internal profit goal, GSK posted an adjusted operating profit of £8.9 billion. Sir Jonathan Symonds, chairman of the company board of directors, touted the company’s ability to meet its guidance in a year of uncertainty due to the pandemic.
“The COVID-19 pandemic dominated all aspects of life and business and GSK was no exception with impacts felt both operationally and among our people. In the face of huge challenges we delivered our financial guidance for the year and continued to make progress on our strategy. This is a testament to the leadership of Emma and her management team who have navigated the company through the year and ensured people across GSK remained focused on our purpose and delivery of performance,” Symonds wrote in the report. “This is a testament to the leadership of Emma and her management team who have navigated the company through the year and ensured people across GSK remained focused on our purpose and delivery of performance.”
