Whether GSK's share price slump and declining profits can be blamed on poor management or - as Jean-Pierre Garnier might argue - on its miserly, unAmerican pay structure, may no longer matter. Being a captain of US industry is not as lucrative, or as much fun, as it used to be.

Before 11 September and Enron, the huge, virtually unconditional options packages awarded to US bosses were licences to print money. The legendary Jack Welch became a billionaire from options linked to General Electric's decades-long share price increase.

Michael Eisner of Disney did it rather more quickly, pocketing $500 million in just one year for pushing up the stock. But that was in more buoyant times. The depressed state of the markets and some fairly genuine soul-searching about corporate excess is leaving America's top executives (relatively) out of pocket.

'Base pay is anywhere from 5 to 15 per cent of a pay package, but we'll see it increase to as much as 45 per cent over the next four or five years,' says Marc Wallace, partner at the Center for Workforce Effectiveness, a US consulting firm.

Merrill Lynch's David Komansky, who earned $37m in 2001, most of it in options, has received a fraction of that this year; the likes of Citigroup's Sandford Weill ($42m in 2001) and Geoffrey Bible of Philip Morris ($50m) will probably also have to settle for a less-than-bumper 2002.

And what about the pharmaceuticals industry, which Garnier has taken as his benchmark? Henry McKinnel, his high-rolling rival at Pfizer, can still boast a fairly breathtaking deal, earning comfortably over $20m. Elsewhere, though, earnings are relatively modest. Sidney Taurel of Eli Lilley made $4m last year, failing to gain from exercising options; William Weldon of Johnson & Johnson a mere $2.5m.

Against this, Garnier's package looks colossal. He also appears to be retaining several features of his contract that could not be claimed by most of his peers in the US. Principally, these include a clause requiring the company to give him two years' notice. Garnier also nets almost £1m a year in pension payments: in the United States, executives are often expected to fund their own pensions. Some of Garnier's arrangements may exceed corporate best practice guidelines in Britain, where he is reportedly the third highest-paid FTSE boss.

It is true, of course, that Garnier's proposed deal still contains 'British' features that demand sustained performance on his part. But the differences between UK and US companies in this respect are narrowing. In the wake of several high-profile accounting scandals, corporate America is quickly dispensing with the 'get-rich-quick' remuneration packages of old.

The problem with conventional options was that executives could reap big bonuses for getting share prices up quickly - a big incentive to cook the books. But Coca-Cola, for example, is one of a number of corporations setting up experimental pay packages with cash, rather than equity values.

In the future, executives are likely to be rewarded rather less on the basis of short- and medium-term stock performance, and rather more on 'value added' considerations such as brand performance. Another suggestion is that they should have to wait longer - several years, perhaps, after they leave their companies - before they get their golden payday.

These proposals are all the rage in Washington, where legislators are preparing to force companies to calculate equity options to reflect their true balance sheet impact. This will make doling out big grants a more visibly expensive option - more difficult, in other words, to justify to shareholders. 'There won't be many Jack Welch's on the horizon,' predicts Wallace. Unless, perhaps, Garnier gets his way.



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