GSK Appoints Jonathan Symonds as New Chairman Effective September 1

Compiled by: Fan Dongdong

After nearly six months of searching, GlaxoSmithKline PLC. (GSK) has finally appointed its new chairman.

On July 24, GSK announced the appointment of Jonathan Symonds, former Chief Financial Officer of Novartis and AstraZeneca, as its next Chairman, with the term effective from September 1.

Jonathan Symonds

GSK is facing a significant business transformation. In a statement, Symonds said that GSK is currently seeking to “create value through innovative R&D approaches” and plans to “create and split into two new world-leading companies,” one focused on pharmaceuticals and vaccines, and the other on consumer health.

The confirmation of the new chairman also means that Philip Hampton, who has held the position since 2015, will officially step down on August 31. In 2014, GSK faced allegations of political bribery in ten countries, including China. Under intense pressure from dissatisfied shareholders, Philip was appointed to the role in a time of crisis. Previously, he served as Chairman of the Royal Bank of Scotland, where he helped steer the bank out of turmoil following the severe impact of the financial crisis. Philip was appointed to the board on January 1, 2015, became Deputy Chairman on April 1, 2015, and assumed the role of Chairman on May 7, 2015. His total remuneration in 2017 amounted to £700,000, approximately RMB 6.13 million.

Philip’s departure also aligns with the company’s business restructuring involving a split into two separate entities. In December 2018, GSK announced plans to divide its operations into two major segments: its consumer healthcare business would merge with Pfizer’s consumer healthcare business to form a joint venture that would be listed independently, with GSK holding a 68% stake and Pfizer holding a 32% stake.

Jonathan Symonds, currently serving as Vice Chairman of the Board of HSBC, appears to bring significant expertise in pharmaceutical mergers and acquisitions. Symonds spent ten years at AstraZeneca, where he was a contender for the role of Chief Executive Officer. He later joined Goldman Sachs before returning to the pharmaceutical industry two years later as Chief Financial Officer of Novartis. Some of the most landmark deals undertaken by AstraZeneca and Roche in recent years were executed during Jonathan Symonds’ tenure. Two months prior to his departure, he helped facilitate AstraZeneca’s acquisition of MedImmune, and he also assisted Novartis in acquiring the generic drug manufacturer Alcon.

According to foreign media, Symonds will receive an annual compensation of £700,000, with £525,000 paid in cash and the remainder settled in GSK stock.

Since assuming the role of CEO, Emma Walmsley has consistently driven the divestiture of GSK’s non-core businesses. In late 2018, GSK announced the sale of Horlicks, its nutrition business within the Consumer Healthcare division, to Unilever for $3.8 billion, raising funds for the acquisition of TESARO. Subsequently, GSK announced a strategic split into two distinct entities: Pharmaceuticals & Vaccines and Consumer Healthcare, with the latter merging with Pfizer’s consumer healthcare business to form a joint venture.

At present, the reform appears to be the right choice. On Wednesday this week, GSK announced its financial results for the second quarter of 2019, achieving a turnover of £7.81 billion, a year-on-year increase of 6.8%, surpassing the average expectation of £7.59 billion; net profit was £964 million, a year-on-year increase of 119%; adjusted earnings per share were 30.5 pence, higher than the market expectation of 25.18 pence.

Reference Source: With pharma-consumer split in its sights, GSK hands chairman seat to Symonds