Protests greeted those arriving at the meeting

Sir Christopher Hogg said there would be a full independent review of the pay contract and further discussions with investors.

The world's second biggest pharmaceutical company suffered an unprecedented defeat at the hands of shareholders over the issue on Monday.

The firm's controversial pay and rewards policy was rejected by more than 50% of voters at the annual general meeting.

Historic

There was particular anger at the pay-off earmarked for the chief executive if he were dismissed.

Shareholders had voted earlier by a clear majority to re-elect the GSK board.

Shareholders express anger Q&A: What does defeat mean?

The vote on the pay contract is only advisory, but GSK has ordered an independent review by Deloitte & Touche.

The results of the review will be delivered in 2004.

Sir Christopher said in a statement: "The major reason for this negative vote has been the fact that there are elements of our senior level remuneration package which do not accord with what is regarded as best practice by some shareholders.

"That is something that the board is aware of and it was one of the reasons that the remuneration committee decided to appoint Deloitte & Touche some months ago to conduct a completely independent review of our approach.

"The review includes all aspects of remuneration, including those to which we are bound contractually."

In the vote on remuneration, only 49.28% backed the board, meaning the biggest shareholder revolt of its kind in UK corporate history.

Investors reacted angrily to a controversial "golden parachute" pay package for chief executive Jean-Pierre Garnier, estimated by the Pensions Investment and Research Consultancy at $35.7m (�22m).

This figure was disputed by GSK, since it includes some $12m of already vested share options.

New powers

Roger Lyons, joint general secretary of the manufacturing union Amicus, said the vote would have far-reaching implications for a number of other big companies.

"Corporate greed will never have the same free reign," he told BBC News 24.

Major shareholders including Standard Life had already said they would be voting against the pay proposals.

The life insurer, which manages over 110 million shares in GSK, said it had "significant concerns over the present pay policies and practices".

Shareholders have been using new legal powers to vote on directors' pay packets.

At the annual meeting of investors at the Royal & Sun Alliance last week, 28% voted against the company's pay awards to top executives, and a further 7% abstained.