Mounting shareholder anger over executive pay in Switzerland forced drugmaker Novartis today to scrap a Swfr72 million (£50 million) “golden gag” it was proposing to pay its departing chairman.
Daniel Vasella was to receive the mega-payout from Novartis, maker of Savlon antiseptic cream, Tixylix cough mixture and Ritalin ADHD medicine, to keep him from sharing his inside knowledge with competitors over the coming six years after he leaves Novartis this week.
The package was announced last Friday, just two weeks before a Swiss referendum that could give shareholders more power to determine executive pay. But since then, Swiss public anger and complaints from shareholders prompted the Novartis about-turn.
“We believe the decision to cancel the agreement and all related compensation addresses the concerns of shareholders and other stakeholders,” Novartis’ vice-chairman Ulrich Lehner said.
Vasella took home Swfr13.1 million last year. He said: “I have understood that many people in Switzerland find the amount of the compensation linked to the non-compete agreement unreasonably high, despite the fact I had announced my intention to make the net amount available for philanthropic activities.”