Novartis scraps payout to departing boss Daniel Vasella

Daniel Vasella Daniel Vasella had said he would spend the money on philanthropic activities

Related Stories

Swiss drugs company Novartis has agreed with its departing chairman Daniel Vasella to scrap a scheme that could have paid him 72m Swiss francs ($78m; £50m) over the next six years.

The announcement followed a campaign by some of the company's shareholders and criticism from Swiss politicians.

Novartis had said the payment was to persuade Mr Vasella not to work for its competitors or pass on any information to them.

He will be stepping down on Friday.

"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," Mr Vasella said.

"That is why I have recommended to the board that I forgo all payments linked to the non-compete agreement."

'Enormous damage'

Mr Vasella was chief executive of Novartis from 1996 until 2010, and has also been chairman since 1999.

His pay-off has been at the centre of debate ahead of a 3 March referendum on whether to give shareholders more power to rein in executive pay.

"This self-serve mentality undermines confidence in the economy as a whole," Justice Minister Simonetta Sommaruga told the Swiss newspaper Sonntagsblick.

"It causes enormous damage to the social cohesion in our country."

Roby Tschopp, head of shareholder group Actares, had described the pay-off as "scandalous".

Mr Vasella is due to step down after the company's annual shareholders' meeting on 22 February.

Pascal Gentinetta, head of the business lobbying group Economiesuisse, had said news of the payments to Mr Vasella had been a tough setback for his campaign for a "no" vote in the referendum.

More on This Story

Related Stories

The BBC is not responsible for the content of external Internet sites

More Business stories

RSS

Features & Analysis

Elsewhere on the BBC

  • UndergroundTravel books

    BBC Culture goes underground to discuss what Londoners are reading on the go

Programmes

  • Evan Blass (known as evLeaks on Twitter)Click

    One of the world's top technology leakers - Evan Blass - explains how he gathers his secrets

BBC © 2014 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.