- GSK boss Dame Emma Walmsley to step aside in January 2026 after nearly nine years at the helm
- She is currently the twenty-fifth longest-serving FTSE 100 CEO
- Dame Emma is the second-longest serving female CEO in the FTSE 100, behind only Liv Garfield of Severn Trent
- GSK shares have lagged the FTSE 100 and major global peers during Dame Emma’s tenure, despite major changes in structure and strategy
“A new group structure, thanks to a spin-off and several acquisitions, a clarified strategy, and much work on the company’s pipeline of new drugs have failed to galvanise the share price of GSK during Dame Emma Walmsley’s eight-plus years as chief executive. That means her successor, Luke Miels, will have much to do when he takes over on 1 January next year,” says AJ Bell investment director Russ Mould.
“Dame Emma may feel frustrated that GSK’s shares are still valued so cheaply relative to its peers, and by the stock’s failure to match the returns generated by the FTSE 100, but she will doubtless argue the building blocks are in place to help the company achieve the goal of more than £40 billion in revenues by 2031, compared to the £32 billion expected by analysts for this year.
“Dame Emma took charge on 1 April 2017, and she has overseen huge changes at the company.
“GSK spun-off consumer healthcare business Haleon in 2022 and has also spent more than $10 billion on acquisitions such as Tesoro, Affinavax, Bellus Health and IDRx as it has looked to boost its internal research efforts to fuel its drug development pipeline.
“As a result, GSK is now focused purely on the development and sale of medicines and vaccines, a strategy which offers the prospect of exposure to tempting demographic trends such as population growth in developing markets and increased longevity in developing and developed arenas.
“Yet the share price has not really moved, and that is despite pressure for more action and better shareholder returns from activist investor Elliott during Dame Emma’s tenure. As a result, GSK has badly lagged its FTSE 100 peer AstraZeneca in both capital and total return terms.
Source: LSEG Refinitiv data
“The shares have also failed to shine on the global stage. GSK’s failure to play a more prominent role in the search for a Covid-19 vaccine, despite its status as a leading provider of vaccines, did not help, and nor did a legal case in the USA involving GSK’s heartburn drug, Zantac, which was the subject of lawsuits that claimed it caused cancer, even if the latter was something Dame Emma inherited. GSK had resolved more than 90% of those cases by the end of 2024.
Source: LSEG Refinitiv data. Local currency terms.
“Even the successful release of shingles treatment Shingrix, back in 2017, as well as lupus drug Benlysta and asthma medicines Nucala and Trelegy failed to convince investors that GSK could replenish its drug pipeline, even after several upgrades to profit guidance, the launch of the first major share buyback since 2013 and the introduction of that long-term sales goal for 2031. GSK has also started to increase its dividend again, after the Haleon demerger prompted a rebasing of the shareholder distribution three years ago.
Source: Company accounts, Marketscreener, consensus analysts' forecasts
“The total value of the buyback and this year’s dividend is forecast by analysts to reach nearly £4 billion, or some 6.5% of the company’s £60 billion stock market capitalisation. Investors are demanding such a lofty sum as compensation for the risks they feel are associated with GSK’s pipeline, especially as the company’s overall sales growth has slowed in recent quarters.
Source: Company accounts. Haleon demerged Q2 2022.
“The pound’s gains against the dollar have not helped here and the most recent quarters have shown improvement, and investors will be pleased to see improved momentum at the vaccines business after a difficult 2024.
Source: Company accounts. Haleon demerged Q2 2022.
“By the time she steps down, Dame Emma will have served for just under nine years as GSK’s CEO. She is currently the twenty-fifth longest-serving boss in the UK’s FTSE 100, where the current average tenure for leaders is 6.1 years, and the second-longest serving female company head, behind Severn Trent’s Liv Garfield.”
Source: Company accounts
