Mr Jean-Pierre Garnier, the chief executive of GlaxoSmithKline (GSK), faces a second shareholder revolt over his "excessive" pay package which could see him pocket up to €26.7 million a year.

Pensions and Investment Research Consultants (Pirc), the shareholder activist group that led the humiliating defeat of GSK's board over Mr Garnier's pay deal at last year's annual meeting, is again recommending that investors vote against its remuneration report.

GSK was forced to rewrite its boardroom pay policies after 51 per cent of shareholders voted against its remuneration report last year.

Pirc welcomed the reduction in Mr Garnier's contract from two years to one, and the trimming of his €32.6 million "golden parachute" which angered investors' last year. But it said the revised plan - which could pay Garnier up to €17.8 million for last year and €26.7 million for 2004 - was still "excessive".

A spokesman for GSK rejected Pirc's complaints last night. "These packages are not excessive when looked at against GSK's competitor group, which is effectively GSK's market for its future executives and its competition for current executives," he said.

But Pirc points out that many of those are based in the US, where executive compensation tends to be far higher. "Such a policy has a risk of resulting in an upward executive pay spiral without improvements in corporate performance," its report says.

Pirc said it was "unable to see a commensurate increase in performance requirements to justify the potential increase in Mr Garnier's package".

GSK's losing vote at last year's annual meeting was the first shareholder defeat for a British board over excessive executive pay, after new rules forced firms to offer investors a vote on their annual remuneration reports.

With its annual meeting set for May 17th, GSK will be keen to avoid a repeat of last year's damaging showdown. - (Guardian Service)