Ethos has issued its detailed analysis and voting recommendations for the Annual General Meeting of Novartis to be held on 26 February 2010. While Ethos recommends to re-elect Daniel Vasella and Marjorie Yang as Directors for a further three-year term, Ethos calls shareholders to oppose the re-election of Hans-Jörg Rudloff, chairman of the remuneration committee (item 5 of the agenda).
Ethos recommends voting FOR the re-election of Daniel Vasella, due to his extensive industry experience and skills as well as the decision of the Board to split the positions of Chairman and CEO.
Ethos however recommends to OPPOSE the re-election of Hans-Jörg Rudloff, who has chaired the remuneration committee for many years (item 5). In this role, he was very involved in the establishment of the current remuneration system that yields excessive executive pay. In particular, in 2009, the remuneration of Novartis' executive committee was CHF 94 million at market value, of which CHF 42 million for Chairman Daniel Vasella. Daniel Vasella's remuneration is 90% variable. In addition, the majority of the shares awarded as variable pay are not conditional upon the achievement of long term performance targets for vesting.
Ethos commends the proposal of the Board to amend the articles of association to allow the shareholders to express their views regularly on the remuneration system and recommends to vote FOR item 4.2 of the agenda.
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