Glaxo faces bonus rebellion
By Tom Burgis
Published: May 22 2008 03:00 | Last updated: May 22 2008 03:00
GlaxoSmithKlinehas become the latest company to face a shareholder revolt over bonus payments to retain an executive in a sign of increasing investor stridency over the issue.
Shareholders yesterday delivered a strong protest over a £2.5m bonus paid to an executive after he was passed over for the top job.
Glaxo is a veteran of rancorous pay disputes with investors. More than one in three voting shareholders failed to support the remuneration report for last year at its annual meeting.
Of ballots cast, 61 per cent voted in favour, 10 per cent against and 29 per cent abstained. Excluding abstentions, 86 per cent backed the report – a low level of shareholder support on a pay vote.
The revolt comes a day after a fraction less than half of Royal Dutch Shell’s shareholders declined to back a plan to pay one-off 1m (£800,000) retention bonuses to the three executives who are likely candidates to succeed the departing chief executive next year.
There is a growing trend for investors to voice displeasure with the practice of paying bonuses, often not linked to performance, to persuade senior managers to stay in their jobs. The revolt also marks broader fears that companies are pushing through ad hoc payments ahead of a downturn.
“GSK is another example where there has been insufficient justification as to why these arrangements are required,” said one top-20 investor who voted against the remuneration report.
In February, Glaxo made a one-off award to Chris Viehbacher, head of pharmaceuticals in the US, of stock worth about £2.5m. The shares become payable in two tranches, the first at the end of this year, the balance in 2011, provided Mr Viehbacher is still at the company.
Mr Viehbacher was one of two candidates who lost out to Andrew Witty last year in the race to succeed Jean-Pierre Garnier as chief executive. The other, David Stout, head of pharmaceuticals, has since left.
A leading shareholder said it abstained because “the company carried out a convincing consultation process”. Unlike the Shell bonuses, the Glaxo award is linked to performance.
The company said: “This award was made following extensive consultation with shareholders, who indicated that they were supportive of the proposal.”
In 2002, Glaxo investors expressed outrage at plans to offer Mr Garnier a package worth £11m and the remuneration report was voted down in 2003.
Copyright The Financial Times Limited 2008
Headline by John Donovan of royaldutchshellplc.com
This website and sisters royaldutchshellplc.com, shellnazihistory.com, royaldutchshell.website, johndonovan.website, and shellnews.net, are owned by John Donovan. There is also a Wikipedia segment.
Royal Dutch Shell conspired directly with Hitler, financed the Nazi Party, was anti-Semitic and sold out its own Dutch Jewish employees to the Nazis. Shell had a close relationship with the Nazis during and after the reign of Sir Henri Deterding, an ardent Nazi, and the founder and decades long leader of the Royal Dutch Shell Group. His burial ceremony, which had all the trappings of a state funeral, was held at his private estate in Mecklenburg, Germany. The spectacle (photographs below) included a funeral procession led by a horse drawn funeral hearse with senior Nazis officials and senior Royal Dutch Shell directors in attendance, Nazi salutes at the graveside, swastika banners on display and wreaths and personal tributes from Adolf Hitler and Reichsmarschall, Hermann Goring. Deterding was an honored associate and supporter of Hitler and a personal friend of Goring.
Deterding was the guest of Hitler during a four day summit meeting at Berchtesgaden. Sir Henri and Hitler both had ambitions on Russian oil fields. Only an honored personal guest would be rewarded with a private four day meeting at Hitler’s mountain top retreat.
IN JULY 2007, MR BILL CAMPBELL (ABOVE, A RETIRED GROUP AUDITOR OF SHELL INTERNATIONAL SENT AN EMAIL TO EVERY UK MP AND MEMBER OF THE HOUSE OF LORDS: 
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A head-cut image of Alfred Donovan (now deceased) appears courtesy of The Wall Street Journal.
