Ethos commends the decision by Novartis to separate the positions of Chairman of the Board and CEO. Moreover, Novartis has accepted to put its remuneration system to the vote of the shareholders. The two decisions meet Ethos' demands and the expectations of institutional investors. Consequently, Ethos has decided to withdraw its “Stop Chairman-CEO” and “Say on Pay” resolutions from the agenda of the General Meeting of 26 February 2010.
“We welcome the decision of Novartis to separate the positions of Chairman of the Board and CEO and to give shareholders a say on remuneration. It is good to see that pressure by the shareholders has bore fruit”, said Dominique Biedermann, Managing Director of the Ethos Foundation. Ethos can now withdraw both the “Stop Chairman-CEO” and “Say on Pay” resolutions, which were filed jointly with eight pension funds*.
Pay Remains Excessive at Novartis
Novartis has announced that the 2009 remuneration of the executive committee amounts to CHF 60 million in tax value, of which CHF 20 million for the Chairman/CEO Daniel Vasella. According to Ethos' calculations based on the information disclosed by Novartis, when assessed at market value, as required by best practice, this remuneration amounts to CHF 94 million for the executive committee, of which CHF 42 million for the Chairman. The Chairman's remuneration consists of a fixed part of 8% and a variable part of 92% paid via four bonus and participation plans in shares and options. This remuneration is more than 500 times the lowest salary in Novartis.
Ethos will disclose its voting recommendations for the 26 February 2010 General Meeting after the publication of the agenda by Novartis.
