Pharmaceuticals
group GlaxoSmithKline (GSK)
has announced ground-breaking plans to increase the pay awarded to
non-executive directors (NEDs).
Under
the proposals, reported in the Financial Times, some of the company’s leading NEDs will receive close to
£100,000 a year. The average basic pay for a NED at a top UK-listed company
last year was £37,500.
The
announcement – contained in a consultative letter to investors – would make
many of GSK’s NEDs among the highest paid
anywhere in the world.
The
NEDs are to collect a basic
£60,000, a rise of 7 per cent. Those who act as chairman of the remuneration or
nomination committee will collect a further £20,000, twice as much as before,
with the audit committee chairman taking an extra £30,000. There will be also
be a new payment to NEDs of
£5,000 for those required to travel abroad to attend company meetings.
In
another new feature, 25 per cent of the total pay awarded will be paid in GSK
shares and may only be redeemed when the NED leaves the company.
GSK
is no stranger to pay controversy. In May 2003, UK
investors, who own about two-thirds of the shares, forced the withdrawal of a
pay plan awarded to chief executive Jean-Pierre Garnier.
