Drug giant GlaxoSmithKline has cut the compensation package for CEO Andrew Witty a second straight year. This time, it’s much larger: 46 percent. Plus, GSK is shaking up its board with a new chair assuming control earlier than planned and two members not standing for election.
Bloomberg news and Reuters reported the latest Witty pay cut on Thursday. A year ago, his bonus was sliced 12 percent due to the scandal in China.
This year, with the China scandal settled through payment of a $450 million fine and sales falling, the GSK board decided to reduce Witty’s bonus 51 percent to $1.41.
His salary did increase 2.6 percent to $1.68 million, ending up in an overall 46 percent pay cut.
GSK made the disclosure in its annual report.
The company, which maintains a large operation in RTP, is in the process of laying off some 900 workers there. Of those, half are being transferred to another company.
Deirdre Connelly, who led GSK’s U.S. operations, also retired earlier this month.
Meanwhile, GSK announced that current board chair Christopher Gent will leave that post as of May 7 and be succeeded by Philip Hampton at that time. The change had been expected to take place later in the year.
Hampton joined the GSK board on Jan. 1 and becomes deputy chair on April 1, the company said.
Currently, Hampton is chair of Royal Bank Scotland. he will leave that post Aug. 31, according to GSK.
Board members Tom de Swaan and Jing Ulrich will not seek re-election, GSK added.
Message to Witty?
“You could read it as a message from the board that he’s under-performing,” Nicholas Turner, an analyst with Mirabaud Securities LLP in London, told Bloomberg when asked about the pay cut.
“[T]he buck stops with Witty,” he said.
A big drag for GSK has been sales of respiratory products.
