Summary remuneration report for the year to 31 December 2004

Annual remuneration

Remuneration for Directors on the US payroll is reported in Dollars. Amounts have been converted to Sterling at the average exchange rates for the year.

Following the merger, those participants in the legacy schemes who elected to exchange their legacy options for options over GSK shares were granted an additional cash benefit equal to 10% of the grant price of the original option. This additional benefit is known as the Exchange Offer Incentive (EOI) and is only payable when the new option is exercised or lapses above market value. To qualify for this additional cash benefit, participants would have had to retain these options until at least the second anniversary of the effective date of the merger. During the year Dr Garnier received $335,730 (2003 - $299,311) relating to options exercised under the EOI. Those amounts are included in other benefits in the table above.

In addition to the remuneration received as a former Director, as set out above, Sir Richard Sykes received £20,417 (2003 - £49,000) for the period 1 January to 30 May 2004 relating to his appointment as Senior Advisor.

Non-Executive Directors are required to receive a significant part of their fees in the form of shares or ADSs and may also elect to invest part or all of the balance of their fees in the form of shares or ADSs. The value of these shares and ADSs at the dates of award are included in fees and salary above. These shares and ADSs are not paid out until the Director leaves the Board. Dr Barzach, Mr McHenry and Mr McArthur left the Board on 17 May 2004. Sir Christopher Hogg and Sir Peter Job left the Board on 31 December 2004. These Directors elected to receive their full entitlement on leaving the Board.

In addition to annual compensation, GSK operates share plans to provide incentives to Executive Directors to achieve longer-term growth in shareholder value. Gains under such plans are recognised on exercise or maturity of the award, but reflect value earned over a period of years. The timing of exercise is normally at the discretion of the Director. Gains in 2004 on exercise of options were: share option plans £3,618,060 (2003 - £3,097,260); long-term incentive plan £nil (2003 - £256,134); Performance Share Plan (PSP) £475,149 (2003 - £nil). Dr Garnier deferred receipt of PSPs vesting in 2004 with a value at vesting of $1,496,608. Full details of the awards granted under the Company's share plans during 2004 may be found in the Annual Report 2004.

In 2001, following the merger, Dr Garnier, Mr Coombe and Dr Yamada were awarded a one-off special deferred bonus as members of the CET. Each was awarded an amount equivalent to his salary on 31 December 2001 and this was notionally invested in GSK shares or ADSs on 15 February 2002. The amount of the bonus vesting on 15 February 2005 was equivalent to the then value of shares or ADSs notionally acquired in February 2002 plus dividends reinvested over the period. Dr Garnier received $1,556,324, and Dr Yamada $697,663. These amounts were paid in February 2005 and are not included in the table above. Mr Coombe has waived his entitlements to the 2001 special deferred bonus of £383,924 and 2004 annual bonus of £650,370. The Company will make a contribution to the pension plan of £1,034,294 in 2005 to enhance his pension entitlement.

The accrued annual benefits under the defined benefit pension schemes operated by the Group were: Dr Garnier $1,039,718 (£541,520); Mr Coombe £345,417; and Dr Yamada $165,000 (£85,938). In addition, Dr Garnier and Dr Yamada are members of a money purchase scheme into which contributions of $66,173 (£36,160) and $82,057 (£44,840), respectively, were paid during 2004.

None of the above Directors received expenses during the year requiring separate disclosure as defined by the Regulations.