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CEO Vas Narasimhan (47) visited St. Petersburg in Basel on Tuesday morning. At the Jakobshalle, Novartis greets its shareholders in broken German and a strong accent: “Dear ladies and gentlemen, welcome.” The American’s speech in German at the plenary meeting, albeit in a few parts, has symbolic significance.
Because it is said that Narasimhan does not care about Switzerland as a location. There is no doubt that Novartis is established in this country and will continue to be so. But at least the CEO doesn’t seem too worried about his Swiss ties. For example, during the presentation of Novartis’ annual figures to Swiss journalists in January, Narasimhan did not attend and handed over the task to the chief financial officer. Interviews in Swiss media? None. Narasimhan prefers to provide information to Anglo-Saxon journalists. No wonder the US is a key growth market for Novartis; The CEO’s media appearance on US television channel CNBC has a different appeal than Blick or the “Handelszeitung”.
Robbery attempt forgotten
CEO Narasimhan’s Swiss modesty is not far away: Last year he received a salary of 16.2 million francs. This is almost double the previous year. This makes Narasimhan the highest-paid coach in Switzerland, possibly in all of Europe.
He doesn’t come close to the outrageous salary of his predecessor, Daniel Vasella, 70: He once earned 40 million a year for his dual role as Chairman and CEO of Novartis. But this was in a different time; that is, before the robbery attempt was admitted in 2013.
“Unfortunately, we are noticing a return to a very high wage level,” warns Vincent Kaufmann (43), director of the Ethos investment foundation, at the Novartis AGM. “We must learn from past mistakes. Excessive compensation can encourage management to take excessive risks just for the sake of its own compensation.”
High salaries cause anger in the hall. “The salaries of those at the top are going up and up. “For everyone else there are just crumbs,” junior shareholder Silvia Schaffner (78) told Blick at the AGM.
Millions to AHV instead of CEO
A former employee who does not want to read his name in the newspaper points to ongoing layoffs at Novartis. “In light of that, I wonder if that’s justified.” As a reminder: Novartis is gradually cutting 1,400 jobs in Switzerland over three years. Only a few voices were heard at the AGM from shareholders who thought the fees were justified.
Novartis justifies its high CEO salary with good business performance, among other things. The company had sales of $45 billion and net profit of $8.6 billion last year. Vas Narasimhan worked well, so he will get extra good salary, or so the logic goes. “But this is not his own effort, it is a team effort,” interjects shareholder Anton Baumberger (73). “With numbers like this you are making a large portion of the population hateful!”
Ruth Weilenmann (72) finds the salary so inappropriate that she gathers her courage and goes to the podium in front of the assembled general assembly. «Does Mr. Narasimhan need this astronomically high wage to make ends meet? I dare to say: No. He then makes a suggestion: “Please transfer the increase amount directly to AHV Switzerland.” The hall accepts this with loud laughter and loud applause.
Actares, an organization representing individual shareholders, demands that CEO salaries not exceed 3 million francs. Otherwise, internal fair distribution would be at risk, argues Actares President Rolf Kurath (69). “The estimated annual salary of a production worker in the Novartis laboratory is 100,000 francs,” he calculates. “The salary gap compared to the CEO is 1 to 160, this is crazy!” Kurath believes this is not only deeply unfair but also detrimental to staff motivation.
Novartis President: “Acceptable”
Vas Narasimhan quietly accepts votes against his million-dollar salary. In his place, as in every General Assembly meeting, Chairman of the Board of Directors Jörg Reinhardt (67) spoke. “We are currently balancing what is perceived as acceptable with what is paid in the rest of the world,” he explains. Reinhardt says the average salary of the CEOs of the world’s 15 largest pharmaceutical companies is 16 million. US pharmaceutical companies, in particular, are known for their exorbitant fees. For example, Pfizer CEO Albert Bourla, 62, recently earned $33 million. “We want the best to work for us and we try to stay fair,” says Reinhardt.
Fair? St. in Basel Very few people in Jakobshalle think it is fair for one person to receive over 16 million. However, the salary to be paid to the management was ultimately accepted with 90 percent approval. Small shareholders who express their anger at general assembly meetings have such a small share in their hands that their votes – even though they are clear – are wasted.
Source :Blick
I’m Tim David and I work as an author for 24 Instant News, covering the Market section. With a Bachelor’s Degree in Journalism, my mission is to provide accurate, timely and insightful news coverage that helps our readers stay informed about the latest trends in the market. My writing style is focused on making complex economic topics easy to understand for everyone.
