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GSK makes Emma Walmsley most powerful woman in FTSE 100 GSK makes Emma Walmsley most powerful woman in FTSE 100
(about 3 hours later)
GlaxoSmithKline has appointed Emma Walmsley as chief executive, making her the most powerful woman in the industry and the UK’s FTSE 100 index.GlaxoSmithKline has appointed Emma Walmsley as chief executive, making her the most powerful woman in the industry and the UK’s FTSE 100 index.
Britain’s biggest drugs company said Walmsley would take over from Sir Andrew Witty when he retires at the end of March after eight years at the helm. Walmsley joined GSK in 2010 and runs its £6bn consumer healthcare business, whose products include Sensodyne toothpaste, Horlicks malted drinks and Panadol painkillers.Britain’s biggest drugs company said Walmsley would take over from Sir Andrew Witty when he retires at the end of March after eight years at the helm. Walmsley joined GSK in 2010 and runs its £6bn consumer healthcare business, whose products include Sensodyne toothpaste, Horlicks malted drinks and Panadol painkillers.
Walmsley will be one of just six female chief executives in the FTSE 100. EasyJet, Imperial Brands, Whitbread, Royal Mail and Kingfisher are also run by women.Walmsley will be one of just six female chief executives in the FTSE 100. EasyJet, Imperial Brands, Whitbread, Royal Mail and Kingfisher are also run by women.
GSK, with a market value of £80bn, is more than twice as big as the next largest female-led company, the tobacco company Imperial Brands, which is valued at £37bn.GSK, with a market value of £80bn, is more than twice as big as the next largest female-led company, the tobacco company Imperial Brands, which is valued at £37bn.
Sir Philip Hampton, GSK’s chairman, is leading a government-commissioned review into increasing the number of women senior executives at Britain’s top companies. Part of the plan is to get more women into senior management positions who can go on to lead Britain’s biggest companies.Sir Philip Hampton, GSK’s chairman, is leading a government-commissioned review into increasing the number of women senior executives at Britain’s top companies. Part of the plan is to get more women into senior management positions who can go on to lead Britain’s biggest companies.
Ketan Patel, a fund manager at EdenTree Investment Management, hailed the appointment as a “watershed moment” for the sector, with Walmsley becoming the first female CEO of a major global pharmaceuticals company. Walmsley, 47, has been a member of GSK’s top executive team since 2011. Before joining GSK, she was at L’Oréal, the French cosmetics company, for 17 years and has worked in the UK, Europe, China and the US.
Patel said: “The sector has scored surprisingly poorly on diversity at the CEO level.” Ketan Patel, a fund manager at EdenTree Investment Management, hailed the appointment as a “watershed moment” for the sector, with Walmsley becoming the first female CEO of a major global pharmaceuticals company. Patel said: “The sector has scored surprisingly poorly on diversity at the CEO level.”
The move came as a surprise to many investors, and as a disappointment to those who had hoped for the appointment of an outsider to push through a breakup of the company by spinning off the consumer health arm. GSK shares dipped 3p to £16.42, a 0.2% fall. The move came as a surprise to many investors, and as a disappointment to those who had hoped for the appointment of an outsider to push through a break-up of the company. GSK shares dipped 0.2% initially, but ended the day broadly flat.
Simon Gergel, the UK equities chief investment officer at Allianz Global Investors, which has a 6% stake in GSK, said: “For those investors who have seen the company’s move towards a more diversified platform in a positive light, this continuation is encouraging. However, it may disappoint investors who have been calling for GSK to sharpen its focus and demerge its consumer health arm.”Simon Gergel, the UK equities chief investment officer at Allianz Global Investors, which has a 6% stake in GSK, said: “For those investors who have seen the company’s move towards a more diversified platform in a positive light, this continuation is encouraging. However, it may disappoint investors who have been calling for GSK to sharpen its focus and demerge its consumer health arm.”
He said the move reduced any dividend or strategy risk an outsider may have posed and suggested that GSK’s new CEO would continue to build on the legacy of her predecessor.He said the move reduced any dividend or strategy risk an outsider may have posed and suggested that GSK’s new CEO would continue to build on the legacy of her predecessor.
Other challenges awaiting Walmsley include declining returns from research and development, increased competition from generic drugmakers and pricing pressure from healthcare providers, especially in the US.Other challenges awaiting Walmsley include declining returns from research and development, increased competition from generic drugmakers and pricing pressure from healthcare providers, especially in the US.
Hampton said: “Emma is an outstanding leader with highly valuable experience of building and running major global businesses and a strong track record of delivering growth and driving performance in healthcare.”Hampton said: “Emma is an outstanding leader with highly valuable experience of building and running major global businesses and a strong track record of delivering growth and driving performance in healthcare.”
Walmsley has been a member of GSK’s top executive team since 2011. Before joining GSK, she was at L’Oréal, the French cosmetics company, for 17 years and has worked in the UK, Europe, China and the US.
Today we’ve announced Emma Walmsley will succeed Sir Andrew Witty as CEO of GSK. Read more: https://t.co/amyuIRK1uJ pic.twitter.com/Z7awbyPKt3Today we’ve announced Emma Walmsley will succeed Sir Andrew Witty as CEO of GSK. Read more: https://t.co/amyuIRK1uJ pic.twitter.com/Z7awbyPKt3
GSK has been looking for a new chief executive since Whitty announced his departure in March. He had been under pressure to speed up turnaround plans for GSK following several years of weak financial performanceand a damaging corruption scandal in China. Panmure Gordon analyst David Cox said: “Being an internal appointment it’s less likely to bring any huge shake-ups, as external hires often like to put their stamp on things... May face a steep learning curve on the pharma side since has a consumer focused background, but will be surrounded by talented management. Fantastic to see a female at the top of such a significant UK company.”
While the rest of the industry has focused on beefing up its drug portfolios, Witty has pursued a different strategy, reducing the company’s reliance on pharmaceuticals in favour of toothpaste, painkillers and other consumer products, along with vaccines. GSK has been looking for a new chief executive since Whitty announced his departure in March. He had been under pressure to speed up turnaround plans for GSK following several years of weak financial performance and a damaging corruption scandal in China. The company has been hit by expiring patents on its top-selling Advair inhaler but reported strong second-quarter results in July.
While the rest of the industry has focused on beefing up its drug portfolios, Witty has pursued a different strategy, reducing the company’s reliance on blockbuster drugs in favour of high-volume, lower-priced sales of toothpaste, painkillers and other consumer products, along with vaccines.
GSK struck only one big deal during Witty’s tenure, the three-part, £15bn transaction with Swiss rival Novartis in 2014 to pool consumer healthcare assets and exchange cancer and vaccine businesses, which was seen as an innovative move in the industry. Walmsley has overseen the creation of the consumer joint venture with Novartis.GSK struck only one big deal during Witty’s tenure, the three-part, £15bn transaction with Swiss rival Novartis in 2014 to pool consumer healthcare assets and exchange cancer and vaccine businesses, which was seen as an innovative move in the industry. Walmsley has overseen the creation of the consumer joint venture with Novartis.
GSK is reviewing its pay policy and declined to disclose details of how much Walmsley will be paid. Witty’s pay and shares package rose to £6.66m last year from £3.9m in 2014. GSK is reviewing its pay policy and declined to disclose details of how much Walmsley will be paid. Witty collected a pay and shares package of £6.7m last year.
Citi analyst Andrew Baum said of Walmsley, who holds an MA in classics and modern languages from Oxford: “A lack of an R&D background or a postgraduate science background does not preclude Ms Walmsley’s ability to materially improve R&D returns so long as she has the appetite/intent to critically assess GSK’s R&D outcomes and add senior external pharmaceutical and R&D hires.” Citi analyst Andrew Baum said of Walmsley, who holds an MA in classics and modern languages from Oxford: “A lack of an R&D background or a postgraduate science background does not preclude Ms Walmsley’s ability to materially improve R&D returns so long as she has the appetite and intent to critically assess GSK’s R&D outcomes and add senior external pharmaceutical and R&D hires.”
GSK is yet to appoint a successor for Moncef Slaoui, the chairman of its vaccines business, who will leave next June.GSK is yet to appoint a successor for Moncef Slaoui, the chairman of its vaccines business, who will leave next June.