March 15, 2017
By Alex Keown, BioSpace.com Breaking News Staff
LONDON – Do women earn less than men for performing the same role? At GlaxoSmithKline , the answer seems to be yes, given the company’s decision to pay incoming Chief Executive Officer Emma Walmsley, the first woman to lead a major pharma company, 10 percent less than her predecessor Sir Andrew Witty. However, the company said its compensation decision was based on Walmsley’s experience levels.
According to a Reuters report, Walmsley, who takes over the company reins in April, will earn a GlaxoSmithKline base salary of £1,003,000—about 10 percent less than Witty’s current salary. Reuters said Walmsley will also “receive significantly lower pension contributions, as well as reduced bonus and long-term incentive opportunities, resulting in a total reduction in her package of about 25 percent,” citing GSK’s annual report. Witty had a total compensation package in 2015 of £6.66 million. For its part, GSK said the decision to provide less compensation to Walmsley was based on the fact that this will be her first time helming a global company like GSK. Walmsley most recently led GSK’s consumer health division.
“Taking into account the fact that this is Emma’s first CEO role, reductions have been made to all elements of her remuneration package in comparison to Sir Andrew’s current arrangements,” the report stated, according to the Reuters report.
Offering lower compensation based on experience levels is not uncommon. When Witty assumed the top spot at GSK nearly 10 years ago, he was paid less than his predecessor, Bloomberg reported.
Since she was appointed CEO-designate, Walmsley has earned a base salary of £850,000.
Before finalizing Walmsley’s salary, the company discussed the issue with shareholders and modified the salary structure based on their feedback. Like the United States, Britain has focused on high salaries executives can draw. A company spokesperson told the wire service GSK was “acutely aware of the need for a balanced and responsible approach to remuneration.”
Walmsley was chosen as Witty’s successor in September 2016. When she was tapped as the new CEO, Philip Hampton, chairman of GSK’s board of directors, praised Walmsley. He said in a statement that she has the necessary experience of building and running major global businesses. He said Walmsley also has a strong track record of “delivering growth and driving performance in healthcare.”
Walmsley joined GSK in 2010 after spending 17 years at L’Oréal, where she held a number of managerial positions, including overseeing the company’s consumer products division in China. Walmsley has been helming GSK’s consumer healthcare division since 2015 following the company’s three-part $20 billion deal with Novartis that saw the company swap its oncology drugs for Novartis’ consumer health products and vaccines.
When Walmsley formally takes over, she will face an immediate test as the U.S. Food and Drug Administration is expected to rule on Mylan ’s fluticasone propionate inhaler, a generic equivalent of GSK’s Advair—a drug that has raked in more than $1 billion annually since 2001. The FDA’s ruling on Mylan’s drug on March 28 comes four days before Walmsley takes over GSK. If the generic is approved, Walmsley will have to focus on bolstering sales from newer respiratory drugs, such as Breo, Anoro, Incruse and Nucala.
Since Walmsley was tapped in September, she has been assembling a team to help guide the company. Last month, GSK hired Luke Miels, a former AstraZeneca executive, to head GSK’s pharmaceuticals division. Miels will replace Abbas Hussain, who is departing the company.
With Miels and head of research Patrick Vallance, Walmsley will be able to shape the future of the company’s pharmaceutical business, which could include carving out new space in the HIV market. In late December, GSK data showed that a combination of GSK’s HIV drug Tivicay combined with a Johnson & Johnson compound was highly effective. Some analysts believe GSK’s combination could slice off some of the market share currently enjoyed by Gilead Sciences .
