RESEARCH TRIANGLE PARK – Drug giant GSK’s new chief financial officer will receive quote a compensation package when she joins the company next spring. Julie Brown, currently Chief Operating and Financial Officer at Burberry Group, will replace Iain Mackay, who has decided to retire next May, GSK announced Monday.

In recruiting Brown, GSK creates an all-female senior management team along with GSK CEO Emma Walmsley, as Reuters news service point out as a rarity within the life science industry.

“I am absolutely delighted that Julie will be joining the leadership team as his successor. Julie is a highly experienced CFO with a tremendous understanding of the biopharma sector. We also share a strong passion for people development, diversity, inclusion and sustainability. I am looking forward to working together to deliver progress for patients, shareholders and our people,” Walmsley said in the announcement.

In spelling out Brown’s compensation, GSK – which employs thousands of people in a variety of operations across the Triangle – noted that the company will pay her a bonus that she forfeits in leaving Bruberry as well as a variety of other stock and pay incentives.

Here are the terms of her agreement as disclosed by GSK:

Remuneration

The Remuneration Committee considered the remuneration arrangements that would be appropriate to enable the Company to recruit and retain an experienced CFO to meet the criteria for the role within the Company’s current shareholder-approved remuneration policy. Given Ms Brown’s wealth of experience in the role and of the industry it was agreed that her remuneration should be set in line with the current CFO’s remuneration, as follows.

Ms Brown’s remuneration arrangements (in pounds, which are equal to 1.07 US dollars as of early Monday):

  £ Notes
Base salary £915,335 The comparator group for pay for the CFO remains the European cross-industry comparator group set out in our Annual Report.
Annual bonus £915,335 The on-target bonus would be 100%, with a maximum of 300% for incremental exceptional performance as for the existing CFO.
Award of Long Term Incentives (LTIs) £1,830,670 This assumes an expected value of 50% of an award of performance shares under the Company’s 2017 Performance Share Plan at a 4x multiple of base salary as for the existing CFO.
Share Ownership Requirement (SOR) 3x This is in line with GSK’s shareholder approved executive remuneration policy approved earlier in 2022.
Pension   Pension arrangements will be in line with those of the wider UK workforce in line with GSK’s commitment from 1 January 2023.
Benefits   Benefits will be in line with GSK’s policy and arrangements for other executives based in the UK to support them in undertaking their role.

Ms Brown’s contract of employment will be available for inspection at the Company’s registered office and on GSK’s website, gsk.com, in due course.

The following Buyout Payments will be provided:

  • a sum (“the Bonus Buyout”) equivalent to Ms Brown’s on-target Burberry bonus for the period from 1 April, 2022 to 31 March, 2023, which she will forego on leaving Burberry,
  • a sum (“the LTI Buyout”) equivalent to the aggregate value of (i) her outstanding Burberry LTIs and SIP shares which will be lost on leaving Burberry, at a price equivalent to the average price of such shares for the one-month period ending on 7 September, 2022, and (ii) the value of any dividend equivalents accruing on those shares between their date of award and her departure from Burberry. Given that the Burberry LTIs are not subject to a performance measure, and only to a performance underpin, no discount will be applied to the value of the shares so calculated.

The timing of these payments will be as follows a cash amount equivalent to:

  • the Bonus Buyout and one-third of 85% of the LTI Buyout will be paid to her in the first payroll following the commencement of her employment with GSK;
  • one-third of 85% of the LTI Buyout will be paid to her in the first payroll following the first anniversary of the commencement of her employment; and,
  • one-third of 85% of the LTI Buyout will be paid to her in the first payroll following the second anniversary of the commencement of her employment.

In addition, she will be paid an amount equivalent to 15% of the LTI Buyout in the first payroll following the commencement of her employment. Ms Brown has agreed that she will invest the net of tax proceeds of this 15% tranche in GSK plc Ordinary Shares at the first reasonably available opportunity having sought dealing clearance and that she will then continue to hold those shares for a period of at least two years. Ms Brown will be required to build and maintain over time a holding of shares in GSK equivalent to a value of three times’ base salary.