Connect to share and comment

Novartis boss admits mistakes after pay-off row

PlacardEnlarge
(Globalpost/GlobalPost)

The outgoing chairman of Swiss pharmaceuticals giant Novartis acknowledged Friday that he had made "mistakes" in connection with a scandal over a massive golden handshake he finally agreed to forego.

"I have committed two mistakes that could have been avoided," Daniel Vasella told the Novartis general assembly on his last day on the job.

The first, he said, had been to accept a goodbye package of a whopping 72 million Swiss francs ($77 million, 59 million euros), meant to ensure that he doesn't go work for any Novartis rivals.

The second, he added, had been to think he could calm the public outrage by announcing last Tuesday he would forgo the golden handshake, which he insisted had intended to give to charity.

The sum caused an outcry among politicians across Switzerland's spectrum, while the tabloid Blick summed it up as "insane", and transparency campaigners pushing for more shareholders' rights filed a lawsuit.

"I know that for the board, I have not always been an easy partner. But I am responsible and I accept the criticism," Vasella told the room full of shareholders.

The value of the 59-year-old's golden handshake was revealed last week by the blog Inside Paradeplatz, named after Zurich's financial district.

Novartis finally back-pedalled, announcing Tuesday that the deal, worth 12 million Swiss francs over the coming six years, had been cancelled.

Ulrich Lehner, vice-president of the Novartis board, on Friday lauded Vasella, who has headed the company for 17 years.

"Out of two, medium-sized companies in Basel, Mr. Vasella built a group with a global name," Lehner told shareholders.

Novartis was born from a 1996 merger between the Ciba-Geigy and Sandoz laboratories, both based in Basel on Switzerland's border with Germany and France.

Novartis posted a net profit of $9.6 billion in 2012, up 4.0 percent from the previous year, though sales were down 3.0 percent to $56.5 billion amid competition from generic drugs.

Despite being hailed by Lehner for his track record, Vasella came under fire from angry shareholders.

"If you'd thought before accepting 72 million, you'd have avoided damaging Novartis' image. You and the board have failed to act transparently," said Rudolf Meyer, head of Actares, a sustainable business group that holds stock in the company.

The announcement of the golden handshake came ahead of a March 3 referendum -- the bedrock of Switzerland's direct democracy -- in which voters will decide whether to give shareholders more powers to rein in executive pay.

Polls show that two-thirds are set to back the measures.

noo/nl-jwf/arp

http://www.globalpost.com/dispatch/news/afp/130222/novartis-boss-admits-mistakes-after-pay-row