Novartis said it would scrap a 72 million Swiss franc ($77.98 million) pay package for outgoing chairman Daniel Vasella, bowing to mounting anger in Switzerland before an investor meeting on Friday.
The move represents a victory for the drugmaker's Swiss shareholders such as Geneva-based Ethos Fund, which had campaigned against paying Vasella 12 million francs over six years to prevent him from working for competitors.
"We continue to believe in the value of a non-compete, however, we believe the decision to cancel the agreement and all related compensation addresses the concerns of shareholders and other stakeholders," Novartis vice chairman Ulrich Lehner said in a statement on Tuesday.
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Vasella, long a lightning rod for criticism of executive pay in Switzerland, said in the statement he understood that Swiss people found the compensation too high. Vasella earned 13.1 million francs for 2012, down slightly from 13.5 million francs the prior year.
Vasella's golden parachute attracted a raft of criticism from top-ranking Swiss politicians and members of the country's pro-business lobby, against the backdrop of a March 3 referendum to give shareholders a veto over excessive manager pay.
Polls published on Sunday showed almost two thirds of Swiss voters favored the initiative.