Speak of lousy timing. After receiving a knighthood from the queen at the end of 2011, GSK CEO Andrew Witty was on a roll. The chair of GlaxoSmithKline’s compensation committee had pointed out that compared to his peers, Witty was being underpaid at £5.7 million ($8.84 million). It was concluded there is “a significant competitiveness gap for our CEO.” Then the company got busted.
“Witty is paid considerably less than his predecessor, JP Garnier, and is seen to be doing a good job,” wrote Guardian financial editor Nils Pratley. “Those with longer memories will also recall that, boss of SmithKline Beecham, had accumulated a share option package worth $100M at the time of the merger with Glaxo Wellcome in 2000.”
This month the pharmaceutical giant agreed to pay $3 billion for fraudulently promoting two of their most popular drugs, the largest fine in U.S. history. In a company statement, Witty said the company will not repeat “the mistakes that were made.” The Justice Dept. charges originated before Witty was appointed CEO in 2008. Still, after all the recent focus by U.K. shareholders on CEO compensation, the huge hit may not have helped his prospects for a raise.
Andrew Witty’s was a story-book corporate rise, working his way up to the chief executive’s office after starting as a management trainee. Now he is paid less than other top British CEOs, including those at pharmaceutical firms. Pratley comments, “What can be said, though, is that we’ve reached the point where the chief executive of a top FTSE 100 company can expect to earn about £10m-a-year.”