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GSK has proposed an increase in the salary of CEO Emma Walmsley to £21.6 million a year as drugmakers have become the latest company to abandon their diversity goals since Donald Trump’s election.
The UK drug maker’s compensation committee suggests Walmsley’s salary, which was £10.6 million in 2024, is behind global pharmaceutical competitors.
According to GSK’s 2024 annual report released Thursday, the CEO’s current pay package was “inadequate to either reward her performance or provide the right ability.” He added that it is in line with the “second role.” . . Challenge to attract outside talent.”
Many FTSE 100 companies are considering increasing executive pay after the success of Smith & ne and the London Stock Exchange Group to ensure shareholder support for the significant increase last year. The UK is far behind the US in US payments, and shareholders are likely to oppose a massive wage package.
Pascal Soriot, chief executive of rival British drug maker Astrazeneca, won £14.7 million in 2024, earning as much as £25.2 million a year under the company’s new pay policy.
GSK is also following many other companies that have waived their commitment to diversity and inclusion after Trump’s election. The US President is extremely critical of what he calls “absolute nonsense” of “discriminatory” diversity measures, threatening investigations into corporate DEI programs.
In its annual report released Thursday, GSK said: “We will now be making changes in several areas related to inclusion and diversity to ensure continued compliance with the law and respect the sales environment, including not setting ambitious goals for our leadership and supplier programs.”
It added that it “mainly met” previous goals regarding ethnic diversity and gender of leadership.
In its annual report, the Compensation Committee said, “We recognize that if GSK is operated solely within the UK, the 2025 policy proposal would be seen differently.” However, he said it was not appropriate to compare Walmsley’s salary with the FTSE 100 CEO, as the company was a global business.
Under the proposal that shareholders will vote at the annual meeting in May, the board proposes that Walmsley’s bonuses increase from 1x to 1.5x base salary, and increase long-term incentive awards up to 6x to 8x. A maximum of £2,156 million will only be awarded if the target is met and the stock price rises at least 50%.
In 2024, her base salary was £1.4 million. Her gross wage package fell from £12.7 million in 2023. This is because growth is slow as a result of problems with the vaccine business.
GSK increased its long-term sales target to £400 billion in 2031, but is struggling to convince investors that there is enough medicine in the pipeline. The stock has fallen 13% over the past year. Hedge fund Citadel took a short position at the company this month, but is now below the 0.5% stake that has sold out of that position or needs to be reported to regulators.
GSK has changed the group of companies that benchmark executive payments to focus solely on drug makers. The current policy, established before GSK, included companies such as Adidas and Heineken as comparators, as GSK spun the consumer health unit Haleon in 2022.
The committee said Walmsley’s current package is in the lower quartile of the Pharma business and should increase along the group’s median.
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The proportion of wages that rely on success in replenishing drug pipelines is increasing.
GSK said the salary “reflects another year of excellent delivery for increasing performance targets,” adding that sales increased 7% year-on-year and core operating profit increased 11% over the same period.
“The proposed changes to our executive compensation policy further strengthen the relationship between management and shareholder interests, along with higher compensation conditioned on industry-leading R&D progress and shareholder returns,” GSK said.
It added that “we are committed to running as a responsible business in an inclusive culture that welcomes a variety of perspectives and experiences.”
“We will suspend and in some cases, certain initiatives will be suspended to ensure that we continue to comply with the laws of the countries in which we operate, including the United States.”
