GlaxoSmithKline, Europe's top drugmaker, acknowledged today that a large proportion of its shareholders had voted against a resolution awarding generous pay packages to executives.
Chairman Christopher Hogg told the firm's annual general meeting an analysis of proxy votes received made it impossible to predict the result before a count of shareholders attending in London. Leading shareholder Standard Life Investments said it was voting against because it had 'significant concerns over pay policies and practices'.
If investors succeed in rejecting the proposals, it would be the biggest snub in this year's stormy annual general meeting season, highlighting growing concern among British investors over generous US-style packages for top executives.
Many GSK investors are seething at the 'golden parachute' Chief Executive Jean-Pierre Garnier would receive if he lost his job, estimated by Pensions Investment and Research Consultancy at $35.7 million - a figure GSK disputes since it includes some $12 million of already vested share options.
GSK tried 10 days ago to placate shareholders by promising a review of existing executive remuneration terms, which include rolling two-year contracts instead of the one-year terms many investors view as best practice.
British companies are now obliged to submit remuneration reports to shareholders, although their vote is advisory only. The result has already proved embarrassing for several firms.
Last week, insurer Royal & Sun Alliance Group faced a revolt by more than one-third of voters - a protest second only to April's rebellion at BAE Systems's AGM, when 49% of votes were cast against directors' pay.
