GSK plc's (LON:GSK) CEO Might Not Expect Shareholders To Be So Generous This Year

Key Insights

• GSK to hold its Annual General Meeting on 7th of May
• Salary of UK£1.36m is part of CEO Emma Walmsley's total remuneration
• The overall pay is 59% above the industry average
• GSK's EPS declined by 8.4% over the past three years while total shareholder loss over the past three years was 11%

Our free stock report includes 4 warning signs investors should be aware of before investing in GSK. Read for free now.

The results at GSK plc (LON:GSK) have been quite disappointing recently and CEO Emma Walmsley bears some responsibility for this. Shareholders will be interested in what the board will have to say about turning performance around at the next AGM on 7th of May. They will also get a chance to influence managerial decision-making through voting on resolutions such as executive remuneration, which may impact firm value in the future. We present the case why we think CEO compensation is out of sync with company performance.

View our latest analysis for GSK

Comparing GSK plc's CEO Compensation With The Industry

At the time of writing, our data shows that GSK plc has a market capitalization of UK£58b, and reported total annual CEO compensation of UK£11m for the year to December 2024. That's a notable decrease of 17% on last year. While this analysis focuses on total compensation, it's worth acknowledging that the salary portion is lower, valued at UK£1.4m.

In comparison with other companies in the British Pharmaceuticals industry with market capitalizations over UK£6.0b, the reported median total CEO compensation was UK£6.6m. Hence, we can conclude that Emma Walmsley is remunerated higher than the industry median. Furthermore, Emma Walmsley directly owns UK£35m worth of shares in the company, implying that they are deeply invested in the company's success.

Talking in terms of the industry, salary represented approximately 59% of total compensation out of all the companies we analyzed, while other remuneration made up 41% of the pie. GSK sets aside a smaller share of compensation for salary, in comparison to the overall industry. If total compensation is slanted towards non-salary benefits, it indicates that CEO pay is linked to company performance.

GSK plc's Growth

GSK plc has reduced its earnings per share by 8.4% a year over the last three years. It achieved revenue growth of 3.5% over the last year.

Overall this is not a very positive result for shareholders. The fairly low revenue growth fails to impress given that the EPS is down. So given this relatively weak performance, shareholders would probably not want to see high compensation for the CEO. Moving away from current form for a second, it could be important to check this free visual depiction of what analysts expect for the future.

Has GSK plc Been A Good Investment?

With a three year total loss of 11% for the shareholders, GSK plc would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary...

Not only have shareholders not seen a favorable return on their investment, but the business hasn't performed well either. Few shareholders would be willing to award the CEO with a pay raise. At the upcoming AGM, management will get a chance to explain how they plan to get the business back on track and address the concerns from investors.

CEO compensation can have a massive impact on performance, but it's just one element. We did our research and spotted 4 warning signs for GSK that investors should look into moving forward.

Important note: GSK is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.