Leschly pay row takes new twist

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The Independent Online
THE CONTROVERSY over the nine-year pounds 90m pay package amassed by Jan Leschly, chief executive of SmithKline Beecham, took another twist when it emerged that his pounds 5.7m "golden parachute" had not been cut in line with the drug group's other directors.

According to SKB's annual report, Mr Leschly is set to receive a windfall of three years' salary and bonus if he loses his job as a result of a takeover.

Mr Leschly's payoff, worth pounds 5.7m on last year's pounds 1.9m remuneration, is more generous than the packages offered to any other SKB director.

This week SKB said it had decided to cut directors' notice periods from three to two years to meet recommendations of the Greenbury committee on executive pay. But the cut does not apply to Mr Leschly, who is on three years' notice despite having a two-year contract.

An SKB spokesman said Mr Leschly, due to retire in September 2000, had been given a three-year payoff to compensate for his shorter contract. He added that before this year's changes the Danish-born chief executive was the only director on a two-year contract.

The spokesman said he could not comment on why Mr Leschly's potential windfall had not been cut in line with those of his colleagues.

The details of Mr Leschly's takeover compensation are particularly sensitive as SKB is expected to play a major part in the pharmaceutical industry consolidation.

In the recent past the company has been involved in failed talks over two high-profile mergers, with its UK rival Glaxo and with the US group American Home Products.