Sack me if you dare

JUST how greedy can one man get? In Jean-Pierre Garnier's case, it seems there are simply no limits. Only four months ago, drugs giant Glaxo-SmithKline was forced by the threat of a major backlash from shareholders to ditch plans to give Garnier a pay rise of £11 million a year.

He is already one of the highest-paid executives in Britain with salary and bonuses worth £2.3 million last year. With extra benefits, his total package was worth £5.1 million.

His British and American pension funds look likely to ensure that any day now he will be the first of our big company bosses to become a £1 million-a-year pensioner.

But for Garnier, 55, that is simply not enough. It has now emerged that his employment contract guarantees him a 'golden parachute' worth a staggering £10.4 million. So if GlaxoSmithKline is taken over and Garnier loses his job, he will walk into the sunset with four-and-a-half years' salary, according to the voting advisory group, Manifest.

The magnitude of the package makes Garnier much more difficult to sack.

GlaxoSmithKline, the world's second-biggest drugs group, is used to fending off criticism of largesse to Garnier. Its chairman, Sir Christopher Hogg, is no stranger to controversy. Last week, as chairman of embattled information group Reuters, he defended the pay and bonus package of its chief executive, Tom Glocer.

At GlaxoSmithKline, Hogg has argued robustly that a big pharmaceuticals company making the most of its money in the US has to pay top dollar to retain and motivate a man of Garnier's talent.

But the latest example of excess to emerge from Garnier's remuneration package coincides with accusations that the drugs group is risking its reputation by failing to get affordable treatments to poverty-stricken countries.

And pressure is growing from some of the biggest investors in the world. Only last week the world's largest pension fund, Calpers, wrote to the company saying it was worried that unless GlaxoSmithKline allowed other companies to produce generic versions of its Aids drugs, it risked global boycotts that could severely damage its business.

Sean Harrington, Calpers' president, warned: 'We feel that the pharmaceutical industry faces very specific risks in regards to reputation and this is particularly true in the case of Aids. How the company handles this risk is important to long-term shareholders.'

Harrington's intervention followed fears raised by some of Europe's leading investors that Glaxo - along with some other drugs groups - risked alienating major customers unless it appeared more sensitive to mounting global health crises, notably in Africa.

Investors are worried that if GlaxoSmithKline seems to be trying to exploit health disasters in developing countries, it could prompt consumers to

steer clear of its far more highly-priced products in the wealthy nations of the West. Shareholders also fear that unless drugs groups loosen their grip on providing crucial treatments to stricken parts of the world, their ability to argue for patent protection elsewhere will be damaged.

One shareholder said: 'It would be ironic if a sector dedicated to saving lives came to have the pariah status of the tobacco industry, but the risk is there.' Glaxo has issued a licence to manufacture an Aids treatment in South Africa, where it is being sued by a number of lobbying organisations over 'excessive' pricing.

But this is unlikely to make much difference since the South African government still has its head in the sand about the need to treat Aids and is largely uncooperative.

Though Glaxo is looking at other licensing deals, the group does not believe these offer a solution to the Aids epidemic in poor nations.

But shareholders are increasingly alert to the damage that can be inflicted on the value of their investments if a company's reputation becomes tarnished.

They are also becoming increasingly alarmed that huge boardroom pay settlements, particularly if they bear little relationship to the performance of a company, can drag its name through the mud.

Stuart Bell of shareholder advisory group Pirc told Financial Mail: 'We have always argued that there was a reputational aspect to executive pay. It is important that companies should align their directors' payments to fair treatment for all stakeholder groups.'

Garnier will get £10.4 million if anything goes wrong for him. His shareholders and millions of his potential customers may not be so lucky.