Novartis chairman’s golden payoff slammed
Malcolm Curtis · 17 Feb 2013, 21:27
Published: 17 Feb 2013 21:27 GMT+01:00
- Novartis chairman to step down as profits rise (23 Jan 13)
- Majority back 'fat cat' pay curbs, poll results show (14 Jan 13)
- Swiss mull slashing 'fat-cat' salaries (20 Nov 12)
Vasella’s 72-million-franc payout, revealed on Friday, elicited sharp criticism from politicians on the left and right and from business groups over the weekend.
“I understand that everyone is revolted by it and so am I,” Rudolf Wehrli, chairman of business lobby group Economiesuisse was quoted as saying from Mexico on Saturday by the ATS news agency.
“Such payouts and salaries amount to a real provocation even for opponents of the Minder initiative.”
The initiative, to be voted on in a national vote on March 3rd, would give shareholders of Swiss companies a binding vote on the pay of top managers, while ending such perks as compensation in advance and golden parachutes.
The publicity of Vasella’s farewell pay comes at an awkward time for the government — and business groups — which are backing a less restrictive counter proposal which aims to combat “abusive” executive pay without hurting Switzerland’s appeal as a place to do business.
“It’s a difficult situation,” Johann Schneider-Ammann, economy minister and member of the centre-right Liberal party (FDP), told SRF, the German-language broadcaster.
“The people all the same, should not throw the baby with the bathwater on March 3rd,” Schneider-Ammann said.
His cabinet colleague, Simonetta Sommaruga, was less charitable.
Vasella’s huge pay packet “is very harmful for social cohesion on our country,” the socialist party member and minister of justice and police, told Sonntagsblick in an interview.
This “mentality of self-service” shakes the confidence in the entire economy, Sommaruga said.
But she added that she was not sure that a “yes” in the upcoming referendum would eliminate the kind of pay issued to Vasella.
The large sums are aimed in part at ensuring that the 59-year-old executive will not work for another company.
Neither the Minder initiative nor the government’s counter-proposal would prevent such kinds of pay deals in the future, she said.
In an interview with SRF, Vasella said he would receive up to 12 million francs a year for six years, provided he fulfilled certain conditions set by Novartis.
Among these is a ban on working for a competing company or passing on information he has gained at Novartis.
Vasella, who is formally quitting at the end of this week, also said that he intended to use the money to donate to public interest organizations and other institutions.
Born in Fribourg and a doctor by training, Vasella in 1978 married the niece of Marc Moret, former chairman of Sandoz.
Vasella was recruited by Sandoz, which later merged with Ciba-Geigy to form Novartis in 1996, when he became CEO.
Three years later he became chairman of the company while retaining the title of chief executive until he relinquished the CEO post in 2010.
Last year he earned a reported 13.1 million francs.
Negative publicity about his retirement pay is not helping opponents of the Minder initiative, named after the small businessman and senator Thomas Minder, who spearheaded the proposal.
A poll published by Sonntagsblick on Sunday showed that 57 percent of Swiss citizens backed the initiative, up from 54 percent in a survey taken in mid-January.
The share of those opposed rose to 37 percent from 30 percent while those undecided dropped to six percent from 16 percent.