Sir Philip Hampton, the current Chairman of the Royal Bank of Scotland, will this week be named as GlaxoSmithKline plc’s new Chairman. He is expected to join Britain’s largest drugmaker as a non-executive director later in 2014 and then take over as Chairman from Sir Christopher Gent in the middle of 2015.
After being slapped with a record $489 million fine for bribing Chinese hospital officials and doctors last week, investors have been pressuring the board to find an early replacement for Sir Christopher.
Sir Christopher, who became GSK’s Chairman on January 1, 2005, is due to retire by the end of next year. GSK has spent the last two years planning his succession.
A long-term task for Sir Philip when he takes the helm will be to find a successor for Andrew Witty, the company’s current CEO.
Sir Philip’s planned move from RBS comes with the UK government still a very long way from returning the bank into the private sector.
Sir Philip Hampton is seen as a safe pair of hands.
Mr. Witty, who has been CEO since 2008, has been popular with investors. However, the recent scandals and weak earnings may have changed attitudes permanently.
Over the past twelve months, investors have become exasperated with GSK’s management. Apart from being haunted by investigations globally, earnings and its share price have declined. So far this year, GSK’s share price has fallen by 11%, while the pharmaceutical industry has posted averages increases of about 25%.
Concern about drug sales
There is growing worry among investors regarding GSK’s core respiratory drugs business.
Sales of Advair (fluticasone/salmeterol), an asthma and chronic obstructive pulmonary disease medication that represents about 20% of revenue, declined by 14% during the first six months of 2014 amid competition from cheaper alternatives. The fall in sales led to a July profit warning.
According to GSK, it is full of promising pipeline drugs. Over the next two years all eyes will be on how many of these new medications take off.
Sir Philip has held the following posts:
- 1990-1995: British Steel plc., Group Finance Director.
- 1995-1997: British Gas plc., Group Finance Director.
- 1997-2000: BG Group plc., Group Finance Director.
- 2000-2002: British Telecom plc., Group Finance Director.
- 2002-2004: Lloyds TSB plc., Group Finance Director.
- 2004-2008: J. Sainsbury plc., Chairman.
- 2008-2009: UK Financial Investments Ltd., Chairman.
- 2009-To date: Royal Bank of Scotland plc., Chairman.