GSK has proposed increasing pay for its chief executive Emma Walmsley to as much as £21.6mn a year, as the drugmaker became the latest company to abandon its diversity targets since the election of Donald Trump.
The remuneration committee at the UK drugmaker has suggested that Walmsley’s pay — which was £10.6mn in 2024 — is behind competitors in global pharma.
According to GSK’s 2024 annual report, published on Thursday, the chief executive’s current pay package was “insufficient either to reward her performance, or to provide the appropriate capacity for succession”. It added that it was more in line with “number 2 roles . . . making attracting external talent challenging”.
A number of FTSE 100 companies are looking to boost executive pay after the success of Smith & Nephew and the London Stock Exchange Group in securing shareholder support for significant increases last year. The UK has lagged far behind the US in executive pay, with shareholders more likely to be against large pay packages.
Pascal Soriot, the chief executive of rival UK drugmaker AstraZeneca, earned £14.7mn in 2024 and under the company’s new pay policy could earn as much as £25.2mn a year.
GSK has also followed a number of other companies in abandoning diversity and inclusion pledges in the wake of Trump’s election. The US president has been highly critical of what he calls the “absolute nonsense” of “discriminatory” diversity measures, and threatened investigations into corporate DEI programmes.
In its annual report published on Thursday, GSK said: “Going forward, we will make changes in several areas related to inclusion and diversity to ensure continued compliance with the law and being respectful of our operating environment, including no longer setting aspirational targets for our leadership and supplier programmes.”
It added that it had “largely met” its previous targets on diversity in ethnicity and gender in leadership.
In the annual report, the remuneration committee said it “recognises that if GSK operated solely within the UK, the 2025 policy proposal could be viewed differently”. But it said that because the company was a global business, it was not appropriate to just compare Walmsley’s pay with those of FTSE 100 chief executives.
Under the proposal, which shareholders will vote on at the annual meeting in May, the board suggests increasing Walmsley’s bonus from one to 1.5 times her base salary and her long-term incentive award from a maximum of six times her base salary to eight times. The maximum of £21.56mn will be awarded only if targets are met and the share price rises by at least 50 per cent.
In 2024, her base salary was £1.4mn. Her total pay package fell from £12.7mn in 2023, partly because of slower growth as a result of problems in the vaccine business.
GSK has increased its long-term sales target to £40bn in 2031, but has struggled to convince investors that it has enough drugs in its pipeline. Its shares have fallen 13 per cent in the past year. This month, hedge fund Citadel took a short position in the company, but it has now either sold out of the position, or reduced it to below the 0.5 per cent stake that it is required to report to the regulator
GSK has changed the group of companies that it benchmarks executive pay against to focus exclusively on drugmakers. The current policy, established before GSK spun off its consumer health unit Haleon in 2022, included companies such as Adidas and Heineken as comparators.
The committee said that Walmsley’s current package was in the lower quartile of pharma businesses, and should be increased so that it was in line with the median in the group.
It is increasing the proportion of pay that is dependent on success in refilling the pipeline of drugs.
GSK said that the pay “reflected another year of excellent delivery against stretching performance targets”, adding that sales grew 7 per cent year-on-year, and core operating profit was up 11 per cent in the same period.
“The proposed changes to our executive remuneration policy further strengthen the link between management and shareholder interests, with higher rewards contingent on industry-leading research and development progress and shareholder returns,” said GSK.
It added that it remained “committed to operating as a responsible business, with an inclusive culture that welcomes different perspectives and experiences”.
“We have paused, and in some cases, stopped certain initiatives to ensure we remain compliant with the law in the countries in which we operate, including the United States,” it said.
