Glaxo says Viehbacher Joins Board, Stout to Leave
One of two top executives who lost out two months ago in the race to become chief executive of GlaxoSmithKline is joining the board, while the other is to leave, Europe's biggest drugmaker said on Friday.
Chris Viehbacher, head of U.S. pharmaceuticals, will take a board seat from Jan. 31, while David Stout, currently president of pharmaceuticals, will leave the company in February.
Andrew Witty was named CEO-designate in October, effective from May 2008. He will also join the board on Jan. 31 and will be succeeded as European pharmaceuticals chief by Eddie Gray, currently head of the UK business.
Glaxo had tried to retain both Viehbacher and Stout by offering attractive packages and boardroom appointments. With the two men seen as potential leaders of rival drug manufacturers, many analysts had thought they both might quit.
"They were both very talented executives and we would have liked for both of them to have stayed," a company spokeswoman said.
She declined to say what financial incentives Glaxo had offered but added Viehbacher's package would be made public in March, when the company details board remuneration in its annual report. Stout's severance deal will not be published, since he was not a board member.
The move to make Viehbacher a new director, alongside Witty, will increase the overall number of executive directors on the company's board.
Currently, the only executives represented at board level are outgoing CEO Jean-Pierre Garnier, Chief Financial Officer Julian Heslop and Chairman of Research and Development Moncef Slaoui.
Chairman Chris Gent said the move to increase executive representation would ensure the board remained strongly aligned to Glaxo's strategy and operational performance.
October's decision to appoint Witty, 43, as group CEO from May 2008 resolved a long-standing succession issue at Glaxo, which had set him, Viehbacher and Stout rival tasks to test their abilities for the top job.
Witty will take over at a challenging time. Many of Glaxo's current blockbusters are losing patent protection and the group has been hit hard this year by safety concerns over diabetes pill Avandia, sales of which have plummeted.
The company has an extensive pipeline of experimental medicines but several are taking longer to get to market than initially expected.