THE pharmaceutical giant Glaxo Smith Kline is to offer £2m retention packages and seats on the board to the two internal candidates who missed out on becoming chief executive.

The offer, which has already been put to Glaxo shareholders, is to try to ensure that the candidates do not leave following the disappointment of not getting the top job. Two months ago Glaxo picked Andrew Witty ahead of his two internal rivals, Chris Viehbacher, president of US pharmaceuticals, and David Stout, president of pharmaceutical operations.

The group, which is capitalised at £70 billion, has told investors that the shares will be handed out to Viehbacher and Stout over two to three years. There is also likely to be a small cash payment.

By promoting two new executives to the board it will lift the total number to four, which investors have been proposing for some time.

Witty has a reputation as an agent of change and must now demonstrate his credentials. Glaxo is at the start of a £12 billion share-buyback programme, although this has done little to arrest the fall in the group’s share price.

There is also a sense in the City that the group needs to undergo further structural changes.

Costs for research and development are rising across the industry, and Glaxo will need to shore up its pipeline of developing drugs if it is to continue to increase sales.

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