Novartis scraps £50m payoff for chairman

City A.M. Reporter
SWISS drug firm Novartis yesterday dropped plans to pay its outgoing chairman SFr72m (£50.6m) to stop him going to work for rivals.

Daniel Vasella’s golden handcuffs deal was announced on Friday but abandoned after a very negative reaction from shareholders.

Executive pay has come under intense scrutiny in the country ahead of next month’s referendum on whether or not to bring in new controls. If it succeeds, non-competition deals will be banned and shareholders will get a binding vote on pay.

Vasella has long been a top earner, taking home SFr13.1m last year and SFr13.5m in 2011. But the proposed exit package proved too much for investors to bear and activist fund managers urged investors to oppose the deal in this week’s meeting.

“I have understood that many people 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,” Vasella said