GlaxoSmithKline CEO Andrew Witty's pay cut 46%

LONDON - The total compensation for Andrew Witty, CEO of GlaxoSmithKline P.L.C., was reduced 46 percent last year as profits of the largest U.K. drugmaker slumped.

Witty's annual bonus was cut 51 percent to $1.41 million, while his salary climbed 2.6 percent, to $1.68 million, taking his total pay for 2014 to $6 million, according to London-based GSK's annual report. Compensation for chief financial officer Simon Dingemans, 51, was pared to $2.85 million.

GSK has operations in Philadelphia and its suburbs, along with other locations in Pennsylvania and New Jersey. The company is implementing layoffs that were announced late in 2014.

The pay cut reflects Witty's struggle to halt a slide in U.S. market share for Advair, the company's top-selling asthma medication, and failure to win over doctors and insurers to products designed to replace it. Shares of GSK fell 8 percent in the past year as the drugmaker was also battered by a bribery scandal in China that resulted in a $457.6 million fine.

"You could read it as a message from the board that he's underperforming," said Nicholas Turner, an analyst with Mirabaud Securities L.L.P. in London. While there are a number of reasons for the decline for GSK's respiratory franchise, "the buck stops with Witty," he said.

The CEO's bonus is determined by operating profit and profit before income and tax, according to the company's annual report. On both those metrics, Witty, 50, fell below target, it said. GSK's 2014 operating profit was $9.27 billion, down from $11.5 billion a year earlier. GSK did not disclose the 2014 targets.

"The vast majority of the chief executive officer's remuneration is based on meeting stretching performance targets," Simon Steel, a GSK spokesman, said in an e-mailed response to questions. "The board recognized the challenging year the group has faced but it also recognized the good progress management has made."