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(Adds comments on dividend, drug sector valuations)
By Ben Hirschler
LONDON, May 7 (Reuters) - GlaxoSmithKline's newchairman Philip Hampton has thrown his support behind thecompany's current structure and chief executive despite pressurefrom some shareholders for a change.
In his first comments since becoming chairman at theconclusion of the drugmaker's annual meeting on Thursday,Hampton told reporters he hoped that CEO Andrew Witty wouldcontinue to run GSK for a good length of time.
"Andrew has the complete support of the board. There arealways shareholders who have points to make, but I certainlyhope Andrew is here for a good while to come," Hampton said.
He said there is no "hard and fast rule" about how longchief executives should serve.
Yet Hampton, also chairman of the Royal Bank of Scotland, said there is an issue about GSK's relative performancein terms of shareholder returns.
"We haven't kept up with some of the better-performingcompanies," he said.
GSK shares have underperformed the European drugs sector by 23 percent in the past year.
Hampton joined GSK's board only after the company agreed a$20 billion-plus asset swap with Novartis last yearbut said he "likes the mix now".
POTENTIAL BREAK-UP?
Asked about the potential for a future break-up of GSK andspin-off of its consumer health division, Hampton said it wasnot obvious that such a move was warranted.
"To me, it isn't a screaming case that this is a uselessconglomerate that needs to be broken up," he said. "There areabsolutely good arguments for that (consumer) business to fitwell with large pharma."
Hampton said he was closely involved in Wednesday's strategypresentation showcasing GSK's new structure after the Novartisdeal, particularly on the issue of protecting the company'sdividend for three years.
GSK's 5 percent dividend yield is a major lure forinvestors, but several years of stagnant sales growth andstalling demand for its market-leading lung drugs have stretchedits payout capacity.
Hampton said it is important to rebuild dividend cover,which would be done in part by the decision to scale back aplanned one-off cash return to investors this year.
GSK is banking on consumer health and vaccines to help todeliver reliable long-term growth, while it is more wary thanrivals about the ability of drugmakers to sustain current highprices for prescription drugs.
Hampton said this cautious stance made sense, given thatcurrent high valuations for early-stage drugs are viewed by manypeople as "a bit of a pharma market bubble". (Reporting by Ben Hirschler; Writing by Martinne Geller;Editing by David Goodman and David Evans)
