Top investor Aviva fires warning shot at GSK boss Emma Walmsley

Glaxosmithkline boss Emma Walmsley has been put on notice by a leading investor as she prepares to fight off Wall Street raiders.

Pensions and investment giant Aviva warned that the ‘jury is still out’ on the chief executive’s future.

The unusually frank comments piled further pressure on Walmsley, 51, at a time when GSK is being circled by US activist Elliott Management.

Pressure: In a shock intervention, pensions and investment giant Aviva warned that the ‘jury is still out’ on Glaxosmithkline chief executive Emma Walmsley’s future

Elliott – notorious for its aggressive tactics – has reportedly built a ‘multi-billion pound’ stake in the drugs giant, triggering feverish speculation about its intentions as well as efforts by Walmsley to show her turnaround efforts are bearing fruit.

Observers say Elliott could seek to push the chief executive out or speed up the separation of GSK’s consumer and biopharma businesses.

Walmsley has insisted she is the right person to lead GSK after the split and pointed to ‘enormous’ progress made during her tenure. 

But although top investors such as Blackrock, Dodge & Cox and Royal London are said to privately back her, Aviva yesterday broke cover and became the first to go on the record criticising her.

GSK announced the separation of its consumer division in 2018 after striking a deal with rival Pfizer to create a £10bn joint venture

David Cumming, Aviva’s investment chief, claimed that GSK’s potential was ‘not being realised’ and that this was reflected in its share price – down 15 per cent since Walmsley took charge in 2017.

‘That’s why Elliott has been allowed appear on the [share] register,’ he told BBC Radio 4.

‘It has left a gap they can exploit. Often the easiest catalyst to enforce change is to change the CEO, so the jury is still out on her future.

‘She’ll have to demonstrate a more positive view to shareholders in terms of her leadership if Elliott is to be kept at bay’

GSK announced the separation of its consumer division in 2018 after striking a deal with rival Pfizer to create a £10billion joint venture. 

David Cumming, Aviva’s investment chief, claimed that GSK’s potential was ‘not being realised’ and that this was reflected in its share price 

The split is scheduled to complete in mid-2022 and will leave the ‘New GSK’ comprised of just the pharmaceuticals and vaccine businesses.

But analysts have questioned whether the four-year process could be sped up now that Elliott – which has a reputation for waging aggressive campaigns for change at big companies – has appeared on the scene.

In one bright spot yesterday, GSK and France’s Sanofi said their potential Covid-19 vaccine – which was delayed by a mishap – triggered strong immune responses in all adult age groups in preliminary trials, boosting optimism the shot may join the fight against the pandemic this year. 

Last night a GSK spokesman said: ‘Nearly four years ago, we set out a new strategy to tackle the historical challenges we faced, transform the company and create long term value for shareholders. 

That strategy involves improving research and development productivity, sharpening commercial performance and separating into two new companies next year.’

This post first appeared on Dailymail.co.uk