(Corrects par 3 to say holders of 55 percent of shares backed
pay plan last year)
* Shareholders owning 60 pct of stock reject compensation
* Influential shareholder groups had recommended 'no' vote
* Swiss citizens have voted strict controls on executive pay
BASEL, April 18 Actelion shareholders
rejected a $5.6 million pay award for the biotechnology
company's chief executive Jean-Paul Clozel on Thursday, making
it the second Swiss company in as many weeks to have its pay
plans voted down by investors.
Public anger over executive salaries has run high in
Switzerland since the country had to rescue UBS from
risky investments blamed on a lavish bonus culture. Swiss
citizens voted in a referendum in March to introduce some of the
world's strictest controls on executive pay.
Influential shareholder groups Ethos, Actares and ISS had
urged shareholders to reject Actelion's compensation package,
which the company reworked after shareholders owning 55 percent
of the company's stock backed it last year, a proportion the
company wanted to improve.
Clozel's pay award for 2012 is 15 percent higher than the
previous year's, owing to a deferred profit-sharing award that
was twice as high as in 2011.
In Thursday's vote owners of 60 percent of the stock
rejected the package. Their vote is still only advisory, as the
Swiss government has not yet decided when the new legislation
comes into force, so Clozel will receive the proposed pay
Actelion also said it would replace its profit sharing plan
in 2013 with one putting more emphasis on achieving yearly goals
and linked to share price performance.
Actelion chairman Jean-Pierre Garnier said the company
believed it had addressed most issues raised by shareholders to
better align the needs of the company and its owners, but added
that it would do more work on the plans.
"We did have some elements which were not based on future
performance, but we have changed all this," Garnier told Reuters
following the meeting in Basel. "We are going to fine tune it
even further and get this behind us."
Garnier is no stranger to acrimonious debates over executive
pay awards: in 2002, when he was chief executive of British drug
company GlaxoSmithkline, the company shelved plans to
double his pay following a shareholder outcry.
Actelion's biggest shareholders beside its managers, who
hold a 10.5 percent stake in the firm, are Orbis Investment
Management Limited and investor Rudolf Maag.
Last week, Julius Baer shareholders also rejected
the pay plans of the Swiss private bank.
At Novartis, a $78 million pay-off for outgoing
chairman Daniel Vasella stirred widespread outrage, which forced
the drugmaker to scrap the payment.
($1 = 0.9312 Swiss francs)
(Reporting by Paul Arnold; Writing by Caroline Copley and
Martin de Sa'Pinto; Editing by Sophie Walker)