Glaxo Imposes Performance-Related Pay on Agencies Worldwide

29 June 2001

GlaxoSmithKline served notice yesterday on its global creative agency roster that it will unilaterally introduce a performance-related payment scheme.

Created last year by the merger of two healthcare giants, Glaxo and SmithKline Beecham, the pharmaceutical colossus said the scheme will be in place by January 2002. It will, says director of European communications Neil McCrae, aim at “rewarding results and quality of service” and “will ultimately benefit both GSK and our agencies” while being “in line with the industry trend”.

Among the shops accepting the inevitable are Dentsu, Grey Worldwide, J Walter Thompson, Jordan McGrath, McCann-Erickson Worldwide, Ogilvy & Mather Worldwide and Publicis. A number of unnamed smaller agencies will also be affected.

GSK's immediate priority concerning its agencies, says McCrae, is the implementation of the new contracts. In the long-term, however, the group does not rule out a roster review, albeit “we are not looking at adding new agencies”.

News source: AdAge Global