GSK (GSK.L), a British pharmaceutical company, recently announced it would not set additional diversity targets. A few days ago a British company GSK (GSK.L) announced it will no longer set diversity targets, significantly impacting GSK diversity targets. This is the latest in a trend reversal of corporate policies after extensive pressure from the U.S. government led by President Donald Trump. Who has vocally opposed DEI (Diversity Equity and Inclusion).
Trump’s Stance on DEI Programs.
President Trump thinks that DEI programs are illegal because they give opportunities to women, LGBTQs, and people with a history of being disliked. As a result of these beliefs, he has released executive orders to reduce federal DEI efforts. These orders even included threats of investigations against companies that continue to do so, including those with specific targets like GSK diversity commitments.
GSK’s Annual Report and Shift in Policy
GSK stated in its most recent annual report that it has mostly met its earlier goals for diversity. Particularly with regard to increasing leadership ethnic and gender diversity. In spite of the achievements of the company. GSK said it will now not set any aspirational targets for leadership positions or supplier programmes due to. Among other things, compliance with the law. GSK said some initiatives were halted or discontinued to comply with legal requirements in countries including the US.
GSK stated, “We will continue to operate as a responsible business with an inclusive culture”. Nonetheless, it recognized that there was a need to be compliant with the changing law concerning GSK diversity targets.
Industry Reactions to GSK’s Decision
While GSK has taken this action, other drugmakers are taking different actions. AstraZeneca is sticking to its DEI targets. The UK drugmaker reiterated its commitment in its annual report. Furthermore, Novo Nordisk (NOVOb.CO), a pharmaceutical company based in Denmark, has also confirmed its commitment to DEI, maintaining their stance compared to GSK diversity targets.
CEO Pay Raise Proposal
GSK is proposing a major pay increase for its Chief Executive, Emma Walmsley, in the same report. Her salary each year could increase from 10.6 million pounds ($13.38 million) in 2024 to a maximum of 21.6 million pounds ($27.27 million). This increase will be based on the company’s performance or a 50% increase in share price. The board said that the current pay of Walmsley did not adequately reflect her contribution or provide enough capacity for succession planning, despite the influence of GSK diversity policies.
By comparison, AstraZeneca’s Pascal Soriot earns £14.7 million for 2024 and could earn £25.2 million per year under a new pay policy.
Conclusion
GSK scaling back of its diversity goals shows how political pressure has become more influential in corporate affairs. As other businesses reassess their DEI strategies, the pharmaceuticals are divided, with some continuing with inclusion while others are letting go of specific targets like GSK diversity initiatives.
