UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR
15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the
month of May 2020
Commission
File Number 001-15170
GlaxoSmithKline plc
(Translation
of registrant's name into English)
980 Great West Road, Brentford, Middlesex, TW8 9GS
(Address
of principal executive office)
Indicate
by check mark whether the registrant files or will file annual
reports under cover of Form 20-F or Form 40-F.
Form
20-F . . . .X. . . . Form 40-F . . . . . . . .
Indicate
by check mark if the registrant is submitting the Form 6-K in paper
as permitted by Regulation S-T Rule 101(b)(1): ____
Indicate
by check mark if the registrant is submitting the Form 6-K in paper
as permitted by Regulation S-T Rule 101(b)(7): ____
GlaxoSmithKline plc (the 'Company')
2020 Performance Share Plan Top-Up Award
On 6 May 2020, following the Company's Annual General Meeting and
shareholder approval of the 2020 Remuneration Policy, the
Remuneration Committee granted a "top-up" conditional share award
to the Chief Executive Officer (CEO) under the GlaxoSmithKline 2017
Performance Share Plan (the 'Plan').
This award was made to deliver in aggregate for 2020 an award level
of 575% of salary to the CEO in accordance with the terms of the
2020 Remuneration Policy and as disclosed in the 2020
implementation section of the Remuneration Report in the Company's
2019 Annual Report.
The top-up award, equivalent to 25% of the CEO's base salary,
increases her award level from 550% of her base salary (awarded on
14 February 2020) to 575% of her base salary.
Under the terms of the Plan, conditional awards are granted over a
specific number of Ordinary Shares and the percentage of awards
that ultimately vests is dependent on the level of achievement by
management against the performance targets set by the Remuneration
Committee.
The price used to determine the number of Ordinary Shares in the
top-up award was £16.814, being the price used to determine
the number of Ordinary Shares awarded on 14 February 2020 and which
is higher than the closing price of £16.68 on the day
preceding the top-up award. The Remuneration Committee considered
it appropriate that the CEO should not benefit from the slightly
lower share price (which would have increased the number of
Ordinary Shares awarded under the top-up
award).
Confirmation of 2020 Performance Measures
Following approval of the 2020 Remuneration Policy by shareholders,
the 2020 performance measures announced on 19 February 2020 are now
confirmed. These measures apply to the original award, made on 14
February 2020, and this top-up award and the performance period for
the awards is the same three financial years from 1 January 2020 to
31 December 2022.
The awards are based on four measures:
Performance Measure
|
Proportion of
each award
|
Relative Total Shareholder Return (TSR)
|
30%
|
Adjusted Free Cash Flow (AFCF)
|
30%
|
Innovation Sales (name changed from R&D New
Products)
|
20%
|
Pipeline Progress
|
20%
|
Relative TSR measure
This measure compares the TSR of the Company's Ordinary Shares over
the performance period with the TSR of the shares of nine (9) other
global pharmaceutical companies (i.e. a comparator group of ten
(10) companies including the Company). This TSR comparator group
remains unchanged. The companies in the TSR comparator group are
AstraZeneca, Bristol-Myers Squibb, Eli Lilly, Johnson &
Johnson, Merck & Co, Novartis, Pfizer, Roche Holdings, Sanofi
and GlaxoSmithKline.
In a group of 10 companies, the median (position 5.5) falls between
two companies. The vesting schedule for the 2020 awards is as
follows:
Ranking position
|
Vesting Schedule
|
1st,
2nd or 3rd
|
100%
|
4th
|
70%
|
5th
|
40%
|
Median
(Threshold vesting)
|
25%
|
6th or
below
|
0%
|
Adjusted Free Cash Flow (AFCF) measure
The use of cash flow as a performance measure is intended to
recognise the importance of effective working capital management
and of generating cash to fund the Group's operations, investments,
and ordinary dividends to shareholders.
Free cash flow represents the operating profit of the business
adjusted for non-cash items after deducting the cost or benefit of
working capital, capital expenditure, contingent consideration
payments, net interest, dividends paid to non-controlling interests
and taxation.
The adjustments to free cash flow, used to set the AFCF target for
the purpose of this performance measure, include foreign exchange,
legal, special pension contributions, and the impact of divestments
and acquisitions. The measure post-adjustment is the
"adjusted free cash flow" target.
This element of the 2020 award will vest as follows:
Performance Level
|
Adjusted Free Cash Flow target
|
Proportion Vesting
|
Below threshold
|
< £9.99bn
|
0%
|
Threshold
|
£9.99bn
|
25%
|
|
£10.30bn
|
50%
|
|
£11.33bn
|
75%
|
Maximum
|
£11.84bn
|
100%
|
The proportions vesting between the above vesting levels will be
calculated on a straight-line basis.
Innovation Sales measure
Due to commercial sensitivity, the Remuneration Committee remains
of the view that the Innovation Sales measure product target cannot
be published at the time of grant. However, the target and vesting
outcome will be disclosed in full at the end of the performance
period.
25% of this element will vest if the performance threshold level is
attained, rising to 100% for stretching performance exceeding 122%
of the set threshold. Below the set threshold, none of this
element will vest.
Pipeline Progress measure
The new Pipeline Progress measure is being introduced to increase
our emphasis on Innovation and to reward acceleration and
strengthening of the pipeline. The measure is based on two equally
weighted elements of our key assets or
indications:
Proportion of LTI award
|
Pipeline Progress - Sub-measure
|
10%
|
Pivotal trial starts, which
will focus mainly on phase III registrational trial starts, but may
also include phase II starts (for example, in
oncology)
|
10%
|
Major regulatory approval milestones
|
Points will be allocated to the successful assets in each
sub-measure based upon their forecast commercial value (peak year
sales) at the end of the performance period.
These sub-measures of the 2020 award will vest as
follows:
Pivotal Trial Starts
Performance Level
|
Points
|
Payout
|
Below Threshold
|
<13
|
Nil
|
Threshold
|
13
|
25%
|
|
14
|
50%
|
|
15
|
75%
|
Maximum
|
18
|
100%
|
Major Regulatory Approvals
Performance Level
|
Points
|
Payout
|
Below Threshold
|
<18
|
Nil
|
Threshold
|
18
|
25%
|
|
19
|
50%
|
|
20
|
75%
|
Maximum
|
22
|
100%
|
Where relevant, achievements between the above performance levels
will be rewarded on a straight-line basis. At the end of the
performance period the Company will provide full disclosure of what
has been achieved, in terms of both milestones and aggregate
points, along with a narrative commentary on
performance.
Notes
1.
To the extent that each element of a conditional award does not
vest at the end of the three-year performance period, it will
lapse.
2.
Dividends will accrue on the conditional award of Ordinary Shares
during the performance period but will only vest to the extent that
the award itself vests at the end of the performance period. These
dividends are not included in the figures below.
3.
The award is subject to an additional vesting period of two years
(the 'Holding Period') from the normal vesting date, i.e. five
years in total. During the additional Holding Period, the
relevant Ordinary Shares would only be forfeited in the event
that the CEO was terminated for cause, and the Ordinary Shares
will continue to carry rights to dividend
equivalents.
Transaction notification
1.
|
Details of PDMR/person closely associated with them
('PCA')
|
a)
|
Name
|
Ms E Walmsley
|
b)
|
Position/status
|
Chief Executive Officer
|
c)
|
Initial
notification/
amendment
|
Initial notification
|
2.
|
Details of the issuer, emission allowance market participant,
auction platform, auctioneer or auction monitor
|
a)
|
Name
|
GlaxoSmithKline plc
|
b)
|
LEI
|
5493000HZTVUYLO1D793
|
3.
|
Details of the transaction(s): section to be repeated for (i) each
type of instrument; (ii) each type of transaction; (iii) each date;
and (iv) each place where transaction(s) has been
conducted
|
a)
|
Description
of the financial instrument
|
Ordinary shares of 25 pence each ('Ordinary Shares')
ISIN: GB0009252882
|
b)
|
Nature
of the transaction
|
A conditional award of Ordinary Shares under the Company's 2017
Performance Share Plan.
|
c)
|
Price(s)
and volume(s)
|
|
Price(s)
|
Volume(s)
|
|
|
£16.814
|
17,830
|
|
|
|
|
|
d)
|
Aggregated
information
|
N/A (single transaction)
|
Aggregated
volume Price
|
|
e)
|
Date
of the transaction
|
2020-05-06
|
f)
|
Place
of the transaction
|
N/A
|
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorised.
|
GlaxoSmithKline plc
|
|
(Registrant)
|
|
|
Date: May
11, 2020
|
|
|
|
|
By:/s/ VICTORIA
WHYTE
--------------------------
|
|
|
|
Victoria Whyte
|
|
Authorised
Signatory for and on
|
|
behalf
of GlaxoSmithKline plc
|
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