GSK Annual Report 2002

50 GlaxoSmithKline Remuneration report
Pensions
Pension benefits are accruing to the following Directors under defined benefit schemes. The accrued annual benefits and transfer values
for individual Directors on retirement are set out below.
Schedule 7A requires disclosure of: the accrued benefit at the end of the year; the change in accrued benefit over the year; the transfer
value at both the beginning and end of the year and the change in the transfer value over the year. The Listing Rules require additional
disclosure of the change in accrued benefit net of inflation and the transfer value of this change.
Change in Change
Change in
accrued Transfer value
Accrued accrued Transfer Transfer over year benefit over of change
benefit benefit value value in transfer year net in accrued
at 31.12.02 over year at 31.12.01 at 31.12.02 value* of inflation benefit*
£000 £000 £000 £000 £000 £000 £000
Dr J P Garnier 929 56 4,966 5,578 612 33 612
Mr J D Coombe 291 17 4,399 4,723 324 12 194
Sir Richard Sykes 729 29 12,573 15,253 2,680 29 887
* The change in transfer value is shown net of contributions made by the individual.
Dr Garnier is also a member of a money purchase scheme. During 2002 contributions of £92,800 were paid into this scheme.
Following Sir Richard Syke’s retirement from the Board, and in recognition of his services to the company, the Board decided to make an
augmentation payment to the pension plan of £300,000. As Sir Richard was not a Director for the full year, the change in accrued benefit
has not been revalued for the effects of inflation and the transfer value of the change in accrued benefit has been calculated as at his date
of leaving. Sir Richard’s transfer value at 31st December 2002 has been calculated on the basis of ‘pensions in payment’ and includes the
additional benefits granted at retirement.
All transfer values have been calculated on the basis of actuarial advice in accordance with Actuarial Guidance Note GN11. The transfer
values represent the present value of future payments for the plans rather than remuneration currently due to the individual and cannot
be meaningfully aggregated with annual remuneration.
Directors and Senior Management
For US reporting purposes, it is necessary to provide information on compensation and interests of Directors and Senior Management
as a group (‘the group’). For the purposes of this disclosure, the group is defined as the Directors, members of the CET and the Company
Secretary. In respect of the financial year 2002, the total compensation paid to members of the group for the periods during which they
served in that capacity was £14,944,872, the aggregate increase in accrued pension benefits was £309,080 and the aggregate payment
to defined contribution schemes was £328,973. During 2002 members of the group were granted options over 873,686 shares and
1,040,000 ADSs and awarded 126,000 shares and 160,000 ADSs in the Performance Share Plan. As of 3rd March 2003, the then-current
members of the group (comprised of 24 persons) owned 334,239 shares and 294,286 ADSs, constituting less than one per cent of the
issued share capital of the company. The group also held, as of that date: options to purchase 3,561,739 shares and 6,497,566 ADSs;
367,000 shares and 480,000 ADSs awarded under the Performance Share Plan; 16,968 shares under the legacy Glaxo Wellcome
Long-Term Incentive Plan; 6,042 shares and 257,945 ADSs under the legacy SmithKline Beecham Mid-Term Incentive Plan, including
those shares and ADSs that are vested and deferred and 1,487 ADSs awarded under the legacy SmithKline Beecham Stock Appreciation
Rights. All such holdings were issued pursuant to the various executive share option plans described in Note 34 to the Financial statements,
‘Employee share schemes’.
Directors’ interest in contracts
Except as described under Related party transactions, during or at the end of the financial year no Director or connected person had any
material interest in any contract of significance in relation to the Group’s business with a Group company. (See Note 35 to the Financial
statements, ‘Related party transactions’).
The Directors’ Remuneration Report has been approved by the Board of Directors and agreed on its behalf by
Mr Paul Allaire,
Chairman of the Remuneration Committee
10th March 2003