Glaxo cuts chief executive's bonus over China bribery scandal
A mainland investigation into bribery allegations against GlaxoSmithKline has prompted the board of the British drugmaker to rein in chief executive Andrew Witty's bonus.
Witty's bonus of £1.88 million (HK$24.3 million) was lower than the potential £2.12 million he might have received, Glaxo said yesterday in its annual report.
Even so, the bonus was more than double the amount awarded for 2012 after the company won regulatory approval of six products last year.
The central government began an anti-corruption probe focused on London-based Glaxo in July.
Allegations by the government that Glaxo bribed hospitals, doctors and officials contributed to a plunge in revenue from China and drove sales to some competitors with similar products, Witty said in October. The scandal also was a hit to its corporate image.
"Both Sir Andrew and the board are mindful of the impact this issue has had on the reputation of the company," Tom de Swaan, chairman of the board's remuneration committee, said in a statement in the report.
"As a result, the bonuses awarded for 2013 were lower than they otherwise might have been," he added.
Earlier this month, Glaxo forecast revenue would rise by about 2 per cent this year as the company introduced the newly approved medicines.
"Andrew Witty's bonus reflects GSK's very strong performance in 2013, which included receiving the highest number of product approvals of any company, meeting the top end of our financial guidance and delivering the best total shareholder return since the formation of the company with more than £5 billion returned to shareholders," said Glaxo spokesman Simon Steel.