GSK backs boss after activist Elliott shows hand

The board of drugmaker GlaxoSmithKline has backed its chief executive amid questions over whether she is right to lead the company through a major transformation.

GSK said Dame Emma Walmsley will help improve performance and shareholder value for years to come.

The company said in a statement on Friday: “The board strongly believes Emma Walmsley is the right leader of New GSK and fully supports the actions being taken by her and the management team, all of whom are subject to rigorous assessments of performance.

“Under Emma’s leadership, the board fully expects this team to deliver a step-change in performance and long-term shareholder value creation through the separation and in the years beyond.”

Ms Walmsey’s role has come under pressure as GSK prepares to split its consumer healthcare business from its pharmaceutical arm next year.

GSK site
GSK plans to split its consumer healthcare business from its pharmaceutical arm next year (PA)

Before becoming GSK’s boss, she had a long career in consumer healthcare. But she will lead the pharmaceutical part of the business following the split.

On Thursday, activist investor Elliott Management said the future chief executives of both new arms “must have the skillsets and expertise to match their respective tasks at hand”.

The statement was widely interpreted as referring to Dame Emma.

Elliott had also called on the board to seriously consider any alternative to the proposed plan for separation.

GSK currently plans to list the consumer healthcare unit on a public exchange, and hand over most of the shares to its current shareholders.

However should another company want to buy the unit, Elliott said, their proposal should be seriously considered.

The board said it would consider all approaches.

It added: “If any alternative opportunity should arise, the board would consider, amongst other things, the realised value against the opportunity cost for shareholders of no longer being able to benefit from the future growth and value accretion of consumer healthcare as an independent global category-leading consumer company, which the board believes will be significant over the coming years.”