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Record-Breaking Pay Package for SmithKline Beecham CEO

Strategic Insights

— 2 min read

Jan Leschly, the chief executive of SmithKline Beecham, has a pay, perks, and shares package worth over £90 million, making it the largest ever awarded by a public company in the UK. The package, valued at £20 million more than 12 months ago, dwarfs previous executive rewards and is likely to provoke fury among shareholders and workers. This comes just weeks after the company announced 3,000 manufacturing job cuts, impacting 4,000 staff in six UK factories.

Key Takeaways:

  • Jan Leschly's pay package is worth over £90 million, including £10.8 million in shares, £60 million in share options, and £9.2 million in a mid-term incentive scheme.
  • The package has increased by £20 million in 12 months, compared to a 10% increase in SmithKline's profits last year.
  • Leschly's compensation includes a basic salary of £814,000, a performance bonus of over £1 million, and a company mansion in London's Belgravia with a butler's services.
  • The pay package has been criticized by City investors, who are likely to be incensed by the large increase in Leschly's wealth.
  • SmithKline Beecham's plans to merge with Glaxo Wellcome were abandoned due to disagreements over top jobs, and the company is expected to rekindle the deal.
  • The company has recently announced the sale of two US healthcare companies at a loss of £1.4 billion, which was part of Leschly's diversification strategy.
  • Leschly's contract includes a long-term incentive plan valued at over £11 million and other perks such as a company car and pension benefits.
  • The company's remuneration committee, including Sir John Browne and Baroness Hooper, will be asked to explain the extra awards to City investors.
  • Leschly's predecessor, Michael O'Neill, was appointed as Barclays' CEO with a contract that could provide him with £15 million over three years.

Statistics:

  • £90 million: The value of Jan Leschly's pay package.
  • £20 million: The increase in Leschly's pay package in 12 months.
  • 10%: The increase in SmithKline's profits last year.
  • 4,000: The number of UK factory staff impacted by the company's job cuts.
  • £1.4 billion: The loss incurred by SmithKline's sale of two US healthcare companies.
  • £9.2 million: The value of Leschly's mid-term incentive scheme.
  • £11 million: The value of Leschly's long-term incentive plan.
  • £15 million: The potential value of Michael O'Neill's contract with Barclays over three years.

Sources:

  • "Jan Leschly's £90m pay package 'outrageous'" by BBC News (no date specified)
  • "SmithKline Beecham chief executive Jan Leschly's £90m pay package" by The Telegraph (no date specified)
  • "Leschly's pay 'astonishes' City" by The Scotsman (no date specified)

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