Business World

Saturday 23 August 2014

Swiss anger over €58m golden handshake

Silke Koltrowitz

Published 19/02/2013 | 04:00

  • Share
Novartis outgoing chairman Daniel Vasella

Pharma group Novartis's decision to pay up to 72 million Swiss francs (€58.5m) to outgoing chairman Daniel Vasella has unleashed a wave of indignation among activist shareholders and politicians.

  • Share
  • Go To

Mr Vasella will receive the "golden handshake" in tranches of 12 million francs over six years if he respects the non-competition clauses of his contract, triggering criticism across political camps.

"This self-serve mentality undermines confidence in the economy as a whole. It causes enormous damage to the social cohesion in our country," socialist justice minister Simonetta Sommaruga told Swiss Sunday newspaper 'Sonntagsblick'.

Mr Vasella, who has been chairman of Novartis since 1999, serving as both chairman and CEO for 11 years from 1999 to 2010, gave details on the amount he is entitled to on Friday, following reports on website Inside Paradeplatz.

He said in a statement that Novartis would pay him a maximum of 72 million francs "according to fair market value" if he refrained from making his knowledge and know-how available to competitors, adding he intended to donate the whole amount, net of taxes, to charity.

Novartis spokesman Eric Althoff said Mr Vasella did not wish to comment further before Friday's annual general meeting in Basel, at which he is not going to stand for re-election as chairman.

Mr Vasella faces stiff criticism from activist shareholder groups. "This is scandalous," Roby Tschopp, head of shareholder group Actares, said. "All we can do is try to motivate as many shareholders as possible to refuse to discharge the board of directors on Friday."

He said, however, it was unlikely a majority of shareholders would refuse, because information on Mr Vasella's golden handshake had come too late to be taken into account by some bigger shareholder groups.

"It only came out because it was leaked. That is not a transparent way of communicating," Tschopp said.

The news on Mr Vasella's multi-million package is likely to boost support for a March 3 referendum to give shareholders a veto over excessive manager pay.

Polls published on Sunday showed almost two-thirds of Swiss voters favour the initiative, the brainchild of businessman Thomas Minder. (Reuters)

Irish Independent

Read More

Editors Choice

Also in Business