GlaxoSmithKline’s (GSK.L) chairman is starting the process of seeking a new chief executive to succeed Andrew Witty, although a handover at the top of Britain’s biggest drugmaker is not expected before 2017.
Chairman Philip Hampton has held a number of meetings with shareholders during which he has made clear that succession planning will be a priority for the board over the next couple of years, according to people familiar with the talks.
Hampton is in no rush and is keen to ensure a considered and orderly transition, they added. Witty himself will play a role in finding his successor.
Witty, a 31-year company veteran who has been CEO since 2008, has been under fire from some investors in the past three years as sales and profits have flagged. His reputation was further tarnished by a damaging bribery scandal in China.
There have been calls from a minority of shareholders, including respected UK fund manager Neil Woodford, for a break-up of the group, with critics arguing its pharmaceuticals and consumer health units would do better as standalone businesses.
Witty has conceded that spinning off the company’s large consumer healthcare division could be an option but he has argued this is not something that should happen in the short term.
Over the coming year, Witty believes, GSK will demonstrate a return to growth and the consumer division will be showing improved profitability. GSK aims to double profit margins at the consumer unit, which is currently being overhauled following a complex asset swap with Novartis (NOVN.VX).
GSK declined to comment on the plans to find a successor to Witty, which were first reported by the Sunday Times. The newspaper said headhunter Egon Zehnder had been asked to draw up a list of potential candidates, both internal and external.
The executive search firm already works on a retained basis for GSK as a consultant on senior management appointments.
Likely internal candidates could include GSK’s global pharmaceuticals head Abbas Hussain and leader of the consumer division Emma Walmsley, as well as finance chief Simon Dingemans, a former Goldman Sachs banker.
Externally, GSK might try to snare a senior figure from a rival drugmaker, such as Novartis’ respected pharma head David Epstein, or else look beyond the drugs sector to an executive with broader experience in consumer products.
Hampton was appointed chairman at GSK’s annual meeting in May 2015 and he said at the time he hoped Witty would remain in charge for “a good while to come”, while adding there was no hard and fast rule about how long chief executives should serve.
[Source:- Reuters]
