Novartis keeps CEO pay steady, but incoming chairman pay drops

BASEL Wed Jan 29, 2014 6:08am EST



Credit: Reuters/Arnd Wiegmann

BASEL (Reuters) - Novartis (NOVN.VX) kept pay for its Chief Executive Joe Jimenez steady, after cutting it last year before a Swiss vote to force companies to accept shareholder limits on executive rewards.

The Basel-based drugmaker, typically the first Swiss blue-chip company pay to disclose pay, said on Wednesday Jimenez was paid 13.2 million Swiss francs ($14.69 million) in total for 2013, more than 3 million francs of it in cash.

It earlier posted lower-than-expected fourth-quarter profit and said it was looking at options, such as joint ventures, for its three smaller businesses.

This year's pay report is the first since Novartis had to scrap a planned 72 million franc payout to outgoing chairman Daniel Vasella three days before facing furious shareholders.

Pay for incoming chairman Joerg Reinhardt is far more modest than that of Vasella, who had been a lightning rod for criticism since a $20 million pay package in 2006.

Reinhardt, who launched the review of Novartis' smaller business units shortly after he arrived, was paid 1.9 million francs for five months at the drugmaker, according to the report.

Vasella took home nearly 3 million francs for the seven weeks he was employed by Novartis until he stepped down last February, including a large contribution to his pension.

Drugmakers and big banks have been the best-paying firms in Switzerland in recent years.

Roche (ROG.VX) Chief Executive Severin Schwan was paid 12.5 million francs in 2012, including cash, bonus, pension and other benefits, while outgoing chairman Franz Humer was paid 8.66 million francs.

Novartis' pay report comes several months before major Swiss banks Credit Suisse (CSGN.VX) and UBS (UBSN.VX) have to disclose what they paid top executives.

UBS drew fire when it disclosed a near $9 million payout for chief executive Sergio Ermotti for 2012, and a $26 million welcome package for its new investment bank chief.

Credit Suisse has acknowledged the public anger, saying it made a mistake when it paid Chief Executive Brady Dougan 19.2 million francs in cash and stock in 2009, plus 70 million francs worth of stock under a bonus plan for 2004.

Last year, Dougan was paid 7.8 million francs while Credit Suisse's top earner, private bank co-head Robert Shafir, took home 10.6 million francs. Shafir is also head of the Americas for Credit Suisse.

Despite cutting pay for Vasella and Jimenez last year before the pay vote in Switzerland, Novartis sparked public outrage and alienated allies in the business community.

Voters overwhelmingly passed the proposal, which allows shareholders to veto executive pay proposals as well as bang big rewards for new and departing managers.

(Reporting By Caroline Copley. Writing by Katharina Bart, editing by Elizabeth Piper)

Comments (0)