Fresh Pharm News

This has become an annual ritual. Each year, a shareholder activist organization called Ethos slams Novartis over Dan Vasella. Once again, his compensation is the issue, although in years past, Ethos has also criticized the drugmaker for allowing him to serve as both chairman and chief executive. Vasella and the board eventually relented and he is now only the chairman (see here and here).

The latest complaint focuses on his $14.8 million compensation last year, which Ethos says is inappropriate, given that Novartis profit fell 7 percent. Meanwhile, the drugmaker has recently announced plans to eliminate thousands of jobs. Hundreds of positions are being eliminated in Switzerland, where Novartis is based, and another 2,000 from the US (see this and this).

And so, Ethos believes Novartis shareholders should vote against re-electing board members who have responsibility for giving a bonus to Vasella. The initiative is part of an attack on Vasella for “earning a million Swiss francs a month, which goes too far,” Ethos director Dominique Biedermann told journalists in Zurich, according to Reuters.

Although Novartis conducted a say-on-pay shareholder vote two years ago, the drugmaker does not do so annually, according to Ethos, which is influential because it makes recommendations for Swiss pension funds. And so, the organization recommends shareholders vote against re-electing two Novartis board members, William Brody and Srikant Datar, who are on the compensation committee.

We asked Novartis for a comment and will update you accordingly.