Swiss pharmaceutical company Novartis was to pay its outgoing chairman $78 million for a six-year consulting and non-compete agreement.
In plain English it wanted to pay the amount to prevent him leaking Company Secrets.
But after severe criticisms all around both changed their minds.
If you can pay $ 78 Million Dollars, rightly called more than evil,imagine how much you have swindled and are swindling consumers.!
I will be posting a blog on Cancer medicines cost details.
My readers, specially who are Doctors,may kindly forward information to me at my email.
No longer! Now both the company and chairman Daniel Vasella have changed their minds.
“I have understood that many people in Switzerland find the amount of the compensation linked to the non-compete agreement unreasonably high, despite the fact I had announced my intention to make the net amount available for philanthropic activities,” said Vasella, who was CEO of Novartis from 1996 to 2010, after which he became board chairman.
That’s largely because of the uproar that followed after the New York Times reported the “golden handshake” deal on Monday. The amount was “beyond evil,” according to Christophe Darbellay, president of the Christian Democratic Popele’s Party, as a Swiss federal judge found the sum to be an “enormous blow for the social cohesion of our country.”
The timing on this was pretty bad. Vasella has “long [been] a lightening rod for criticism of executive pay in Switzerland,” reports Reuters. And on Friday, Novartis will hold its general meeting with shareholders. More critically, though, in two weeks, Switzerland will vote on a referendum to give shareholders decision-making power over executive pay. If the March 3 referendum passes, the heads of companies like Novartis, Roche and Nestle could see their compensation set by shareholders. Though other countries have non-binding “say on pay” laws, Switzerland would be the first country to enforce shareholder decisions (paywall).(qz.com)
http://qz.com/55008/novartis-wanted-to-pay-an-exec-78-million-to-keep-secrets-that-dont-exist/
Look at Novartis Compensation package here.
Base compensation
Each associate is given a fixed salary based on job characteristics, market competitiveness and the associate’s skills. Salary growth depends on the associate’s individual performance and level compared to the benchmark.
Variable compensation
Novartis Group companies have three variable compensation plans:
Short-Term Incentive Plans
Awards under the short-term incentive plans are made each year based on the associate’s individual target incentive percentage, individual year-end performance rating as well as on the Group’s or business area’s performance.
Associates in certain countries and certain key executives worldwide are encouraged to receive their annual incentive awards fully or partially in Novartis shares instead of cash by participating in a leveraged share savings plan.
Novartis Equity Plan “Select”
Each year, approximately 10 percent of all full-time-equivalent associates worldwide may be eligible for a grant under the Equity Plan “Select”. Grants can be taken in the form of restricted shares, tradable share options or a combination of both, with a vesting period of three years. In some jurisdictions Restricted Share Units (RSU) are granted rather than shares.
Long-Term Performance Plan
The Novartis Long-Term Performance Plan rewards key executives who have a significant impact on the long-term success of the Group by aligning the incentives of key executives to the performance of Novartis.
Benefits
Novartis benefits programs are an integral part of the total compensation policy and strategy and are designed to meet the challenges of the growing, global competition for talent.
These programs support the overall business objectives and strategy of Novartis. Benefits are aligned with local legislation and practices in each country and are established to provide a framework of security for associates.
http://www.novartis.com/careers/compensation-benefits/index.shtml
http://www.iaeste.ch/Trainees/Events/2008/IndustrialSightNovartis/
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