* Swiss referendum on executive pay on March 3
* Vasella's $78 mln pay-off sparked public outrage
(Adds results of votes)
By Caroline Copley
BASEL, Feb 22 Drugmaker Novartis's
outgoing chairman Daniel Vasella said a deal to give him a $78
million pay-off was a mistake, as he tried to quell public
outrage ahead of a Swiss referendum on corporate pay.
Earlier this week, Novartis scrapped a plan to pay Vasella
12 million Swiss francs ($13 million) annually for six years to
stop him working for rivals, after news of the package drew
A March 3 referendum in Switzerland will ask whether
shareholders should have a binding say on pay and ban "golden
handshakes" for new arrivals and "golden parachutes" for
departing managers, such as Vasella.
"The fierce reaction and reproaches that were made as a
consequence of the many-sided discussions about my compensation
did leave its mark on me," 59-year-old Vasella said on Friday in
opening remarks at Novartis's annual shareholder meeting, which
was covered live on television.
"I made two avoidable mistakes. The first was to even
negotiate this contract. And the second to believe that giving
up this individual payment to charities would be considered as
something positive by society."
Vice-chairman Ulrich Lehner praised Vasella's achievements
during his 17 years at the helm, adding that events showed the
company took the concerns of shareholders seriously and there
was no need for a "regulatory corset".
The latest poll, published on Wednesday and conducted before
news of Vasella's deal, found 64 percent in favour of greater
shareholder power over pay.
"Go give the board a hard time," the driver of a packed tram
told passengers heading to the Novartis meeting in Basel.
Scrapping Vasella's pay-off did little to appease some
investors at meeting, which ran nearly four hours. Activist
shareholder group Actares had said shareholders should reject a
so-called discharge for Novartis's board for their performance
last year in protest at their agreeing to the pay-off.
"We have the impression that no-one had the courage to
challenge the chairman who, in the course of 10 years as
chairman and CEO, increasingly became an autocrat," Dominique
Biedermann, director of shareholder group Ethos told the AGM.
Rudolf Meyer, president of Actares said he hoped Novartis
board members would be able to speak more freely following
Some shareholders were not content with criticism.
Hans-Jacob Heitz, a lawyer, is seeking a criminal complaint
against Novartis and its compensation committee, alleging a
breach of trust.
Despite the criticism, 93 percent of shareholders granted
the board discharge, while only 20 percent of shareholders
rejected a new compensation system.
Four new board members, including 56-year-old Joerg
Reinhardt, a Bayer healthcare head, who will take
over as chairman on August 1, were elected.
($1 = 0.9294 Swiss franc)
(Additional reporting by Paul Arnold; Editing by Dan Lalor and