Garnier's 'parachute' deflated by shareholders

GlaxoSmithKline (GSK) suffered a major setback as shareholders voted not to approve the proposed US$36m (Euro 31m) 'golden parachute' for ceo Jean-Pierre Garnier should he resign or lose his job.

Shareholders were incensed that Dr Garnier would be entitled to such a generous severance package in the current financial gloom, with 51% voting against adopting the proposal.

The severance package comprises two years worth of salary, bonus and benefits, which equates to around US$7.3m.

Although the vote is only advisory, it is a clear indication of shareholders' views on the matter, and the company is taking the result very seriously. GSK's chairman, Sir Christopher Hogg, said: 'Although Resolution 2 was advisory the Board takes this result very seriously. The major reason for this negative vote has been the fact that there are elements of our senior level remuneration package which do not accord with what is regarded as best practice by shareholders.

'A review by Deloitte & Touche will include all aspects of remuneration, including those to which we are bound contractually. It will bear firmly in mind the new expanded guidelines on executive remuneration which the Association of British Insurers issued in December 2002, as well as the need to ensure that the remuneration we offer our key executives and scientists is competitive with that provided by other pharmaceutical companies.'