His demands will be a test case under the government's new rules to give shareholders the right to block big pay awards.

It has emerged that GlaxoSmithKline, whose products range from the controversial anti-depressant Seroxat to Ribena, is planning a series of secret meetings with key shareholders to get their backing for Mr Garnier's new pay deal before going public with the details.

The Guardian has learned that the 54-year-old French-born executive, who guards his privacy and is known throughout the drugs' business simply as JP, wants nearly one million share options and around 200,000 free shares. This is more than double the package he received last year.

The one million shares are currently worth around £12.5m. He would be awarded them at a discount, and would then receive any profit from a rise in the share price. The free shares he wants are currently worth £2.5m, and Mr Garnier would get extra profits from any share price increase, even if the rise was prompted only by a general rise in the stock market.

Shareholders, who have been told by letter of the planned pay rise, are already angry. They have long feared US-style pay deals being imported to UK companies, because they would ratchet up salaries throughout Britain's boardrooms.

A spokesman for the National Association of Pension Funds (NAPF), whose members control one third of the stock market, said: "Shareholders are going to be very concerned at increases of this scale, especially given the damage that has been done to shareholder value".

Mr Garnier's timing is certainly not the best. The GlaxoSmithKline share price has fallen from more than £18 when Mr Garnier took over in April 2000 to £12.50, and last year the group's profits fell from £6bn to £4.5bn.

The decline was due to a large extent to the huge costs incurred when GlaxoWellcome merged with SmithKline Beecham to form the world's second biggest drugs group, but that merger has been a far from overwhelming success. The idea was to create a vast research machine which would discover new drugs at a faster rate. But Mr Garnier has faced criticism in recent months because its scientists have so far failed to come up with any new blockbuster treatments.

The rationale behind the merger was also called into question when the company's own research chief said that big was not necessarily best when it came to finding new medicines, and that universities had just as much chance of finding new compounds.

The company then split its research efforts into six separate divisions to be run almost as separate companies, only for the lead scientists heading three of these units to quit this year. Insiders say morale is low, and it is likely to take a nosedive as details of Mr Garnier's pay demands - the proposals apply only to him and none of his senior staff - become the subject of office gossip at the company's brand new headquarters in west London.

According to the recent Guardian/Inbucon executive pay survey, Mr Garnier was the third highest paid FTSE-100 company boss last year, behind Bart Becht of Reckitt Benckiser and Tony Ball of BSkyB.

However, the company is telling its shareholders he should not be measured against his UK peers, but against much more highly paid American executives. According to shareholders this is the only reason they have been given to explain the new pay demand.

A spokesman for the company said it was "inappropriate to discuss private meetings" but suggested Mr Garnier also needed the attraction of more money to keep him motivated: "GSK aims to have remuneration policies and programmes that will enable it to recruit, retain and motivate the top calibre executive talents that it needs".

The new plan has been put together by a six-strong committee of non-executive directors headed by an American, John Young, 69, who is also on the board of oil giant Chevron Texaco and a number of biotech companies. Also on the committee is Sir Roger Hurn, the former chairman of Marconi who was forced to stand down when the company faced collapse. The Marconi scandal also cost him the chairman's seat at the Prudential insurance company.

Earlier this year the Pru was forced to back down when it proposed an £18m pay deal for its top executives.

NAPF said it would also be examining the terms of Mr Garnier's pension. As part of his existing pay deal he is guaranteed a pension of £1m a year, the highest for any FTSE boss. He is also entitled to up to six years' extra contributions from the company, even if he is fired.

The NAPF spokesman said: "We do not want to see pensions used as a backdoor way of giving directors extra rewards". Earlier this year GlaxoSmithKline closed its final salary pension scheme for its staff.

Mr Garnier, a pharmacologist and Fulbright Scholar, runs GSK from an office in Philadelphia. A large proportion of the company's sales and shareholders is in the US.

One shareholder said yesterday: "He runs it as though it is an American company. But Glaxo will have an uphill struggle with what they are trying to do. He is already paid an awful lot, and it is not clear what the performance is that merits this."

From Horlicks to HIV drug: how they sell

Prescription drugs

Seroxat

Antidepressant, also used for treatment of anxiety disorders

2001 sales: £1.86bn

Augmentin

Antibiotic for treatment of respiratory tract infections

Sales: £1.42bn

Flixotide

Inhaled steroid for treatment of respiratory inflammation Sales: £915m

Seretide

Bronchodilator and anti- inflammatory in single inhaler for asthma

Sales: £850m

Imigran

For treatment of migraine

Sales: £758m

Avandia

New class of medicines used to treat type 2 diabetes

Sales: £707m

Combivir

Combination of Retrovir and Epivir for HIV patients

Sales: £606m

Zofran

Anti-nausea drug for chemotherapy patients

Sales: £601m

Ventolin

Short-acting bronchodilator for treatment of asthma

Sales: £601m

Direct-to-consumer products

Aquafresh

Toothpaste

Sales: £401m

Lucozade

Glucose energy drink

Sales: £401m

Ribena

Vitamin C-enriched juice drinks

Sales: £182m

Panadol

Analgesic for fever and pain

Sales: £171m

Horlicks

Nutritional drink

Sales: £174m

Nicorette/Nicoderm/ NiQuitin

Smoking control gum and patches