Leading shareholders in GlaxoSmithKline (Amsterdam: GO8.AS - news) (GSK), Britain’s biggest drugs company, are piling pressure on its board to reduce a proposed multi-million pound pay deal for Emma Walmsley, its new chief executive.
Sky News has learnt that a number of major investors in the company are demanding that it slashes Ms Walmsley's prospective package on the basis that it is insufficiently lower than the one awarded to Sir Andrew Witty, her predecessor.
Sir Andrew, who has run the manufacturer of Beechams flu remedies and Sensodyne toothpaste since 2008, is paid nearly £1.1m a year in base salary.
In total, he was paid £6.66m in 2015.
Sources said that Urs Rohner, the chair of GSK's remuneration committee and former chairman of Credit Suisse (IOB: 0QP5.IL - news) , had floated a deal under which Ms Walmsley would earn an annual salary of just under £1m.
A number of shareholders have told the company that the new boss, who has been on a salary of £850,000 since being appointed as its CEO-designate last autumn, should be paid a package which more appropriately reflects her experience.
The elevation of Ms Walmsley, who has run GSK's consumer products unit since 2010, will make her the most senior businesswoman in Britain, and one of only a handful of female chief executives.
She will face a number of critical early challenges, including a decision about whether to retain the corporate structure championed by Sir Andrew in the face of demands for a break-up from fund managers such as Neil Woodford.
The consultation between Mr Rohner and leading shareholders comes during a fraught round of negotiations between leading companies and City institutions, which are under pressure to show their teeth on boardroom pay amid intense political scrutiny.
Shareholders such as Fidelity, Hermes Investments and Legal & General Investment Management have outlined a range of proposals for reforming executive pay, including ousting boardroom pay chiefs if fewer than 75% of investors back AGM pay resolutions.
The Government is currently sifting through responses to a green paper on executive pay and corporate governance, which most City figures expect to lead to the publication of pay ratios and potentially more binding votes for investors.
In a statement issued to Sky News on Thursday evening, a GSK spokesman said: "We are acutely aware of the need for a balanced and responsible approach to remuneration.
"We are in active consultations with shareholders on these matters and have been over several months.
"We have yet to submit our final proposals."
GSK is under pressure to finalise its new pay policy, which will be put to a binding vote at its annual meeting during the spring, within days.
Its annual report containing details of the policy, and Ms Walmsley's package, is expected to be published in the second half of March.
One source said that discussions between Mr Rohner and GSK shareholders had highlighted the fact that Ms Walmsley would benefit from pension arrangements which much less generous than those of Sir Andrew's final salary pension deal.
Ironically, the threat of an escalating dispute with investors thrusts Sir Philip Hampton, GSK's chairman, back into the spotlight, just days after he was applauded by the City for introducing a new remuneration structure at Anglo American (LSE: AAL.L - news) , the FTSE-100 mining group.
Analysts pointed out that Sir Andrew was paid less than many of his peers at Swiss and US-based pharmaceutical companies, and that GSK would argue that it needed to pay competitively to attract talent in a global industry.
GSK is no stranger to pay rows; a £20m package for its then chief executive, Jean-Pierre Garnier, lit the touchpaper for shareholder revolts on the subject of remuneration.
None of GSK's leading shareholders would comment.