GlaxoSmithKline chief executive Sir Andrew Witty has seen a major decline in his total remuneration for last year, affected by the group's falling sales in Europe.
Sir Andrew’s performance-related bonuses (which accounted for 72% of his remuneration) were halved, from £5.7 million to £2.8 million, so that his overall pay came in at £3.9 million, down from £6.8 million in 2011. GSK's annual report revealed that his annual bonus was £905,000, down from £2.0 million last year.
GSK's R&D chief Moncef Slaoui's package fell 5.8% to £4.6 million last year. The annual report said the research arm of the business enjoyed a "very successful year", stating that R&D "exceeded the pipeline development and value targets for the year". Dr Slaoui was also given credit for designing and implementing "a new integrated way of working between R&D and other parts of the business to create a strong, global product launch capability for GSK’s pipeline".
Tom de Swaan, chairman of GSK's remuneration committee, said remuneration "reflected a very challenging operating environment, particularly in Europe, where the outlook for the group significantly worsened during the year". He added that "despite this, management delivered strong sales performance in emerging markets, consumer healthcare and other growth businesses".
Mr de Swaan claimed the current structure "strikes a good balance between motivating and retaining our executives, while at the same time incentivising them to deliver long-term sustainable returns to shareholders".