Garnier sold $11.7 million of ADRs as part of options that were expiring Nov. 12. He sold 144,967 at an average price of $52.12 on Aug. 3 and 80,357 at an average price of $52 on Aug. 6. The options were granted at a price of $40.54 each on Nov. 13, 1997. "There are only certain periods in the year when he's able to sell and exercise shares," Glaxo spokesman Phil Thomson tells the wire. "That's the reason behind the timing."
Glaxo ADRs, which represent two ordinary shares, have lost 9.4 percent of their value since a May 21 report in the New England Journal of Medicine linked Avandia, the world's top- selling drug for the disease in 2006, to a 43 percent increased risk of heart attacks. Avandia is Glaxo's second-biggest product and the panel decision was a big boost to the drugmaker.
Garnier, 59, now holds 505,824 Glaxo ADRs, the company said. The ADRs are valued at about $26.4 million based on yesterday's closing price. The amount is more than 14 times his base salary, exceeding a company guideline that the CEO hold at least four times his salary in shares.
The CEO was paid $1.7 million in salary and a bonus of $3.08 million in 2006. He has led Glaxo since 2000 after joining in 1990 as president of SmithKline Beecham Plc's North American unit. Glaxo Wellcome Plc and SmithKline Beecham merged in 2000.
Garnier is scheduled to retire in May 2008, when his contract expires. Glaxo's board is conducting a search for his successor. Three internal candidates are qualified to lead the company after he retires, Garnier has said.
One of the candidates, Chief Operating Officer David Stout, sold 15,240 of the company's ADRs for $789,432 on Aug. 3, Glaxo said, generating proceeds of $171,602. Stout sold the ADRs at an average price of $51.80 each. The ADRs were granted on Oct. 30, 1997 at a price of $40.54 and were set to expire on Oct. 29, the company said.