GlaxoSmithKline – AGM 6 May 2020
Items 2-3: Remuneration report and policy
The executive incentive is highly excessive with a maximum of 800% of base salary. The qualitative criteria count for 30% of the bonus and vest in full. There is a weak alignment between the executive remunerations, shareholder interests and GlaxoSmithKline (GSK) performance. The quantum for the year is also excessive: Emma Walmsley's 2019 remuneration corresponds to 219% of the UK median remuneration in the MSCI Europe index or 290% of the Healthcare sector median.
Item 15: Re-election of Mr. Rohner, Chair of the Remuneration committee
ECGS has serious concerns about executive remunerations. GSK regularly revises LTI performance targets of Adjusted FCF, which ECGS highly disapproves. Under the Investment Association's principles of remuneration, retesting or retrospective changes to performance conditions is not acceptable. In line with our policy, ECGS holds responsible the Chair of the Remuneration committee and we recommend to oppose his re-election.
Item 22: Share buybacks
We regret that GlaxoSmithKline has denied shareholders the opportunity to vote on the dividend. We consider that the dividend is high and it is not prudent to authorise any share buyback regarding COVID-19 uncertainty. In line with ECGS's voting policy, we recommend that shareholders oppose this resolution.
GlaxoSmithKline is a global healthcare company. Co.'s segments include: Pharmaceuticals; Vaccines; and Consumer Healthcare. The Pharmaceuticals segment is focused on developing new medicines in respiratory, HIV, oncology and immuno-inflammation, with discovery research exploring these and other areas. The Vaccines segment has a portfolio and pipeline of vaccines to help protect people throughout life. Co. delivers vaccines to people living in over 160 countries. The Consumer Healthcare segment develops and markets consumer-preferred brands in oral health, pain relief, respiratory, nutrition/gastro-intestinal and skin health.
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