Novartis CEO Vasella grilled over pay packet

By Sam Cage

BASEL, March 6 (Reuters) - Novartis (NOVN.VX) shareholders gave Chairman and Chief Executive Officer Daniel Vasella a hard time over his 44 million Swiss franc ($36.18 million) pay package before re-electing him to the jobs on Tuesday.

They used words like "arrogant" and "inappropriate" to describe his compensation package and he directed the questions to Lead Director Ulrich Lehner. Lehner stressed that executive compensation was performance based during remarks at the annual general meeting.

"Let me assure you, 91.8 percent of Mr Vasella's compensation is variable, meaning performance related," Lehner said. "If the performance is not there ... then the compensation will go down. Hopefully not."

But Novartis did try to appease shareholders by scrapping Vasella's "golden parachute" severance payments when he leaves the company. The shareholders voted overwhelmingly to keep Vasella in his jobs.

The Swiss press has also helped highlight the size of Vasella's pay package with a series of articles questioning rising executive compensation at big Swiss companies, including banks UBS (UBSN.VX) and Credit Suisse CGSN.VX and food group Nestle (NESN.VX).

Investor foundation Ethos said last year executive pay at Swiss firms shows little correlation to company performance and lacks the transparency of other European countries.

Even so, big local companies still pay their board members significantly less than comparable firms in the United States, the global leader in executive pay.

By contrast Franz Humer, chief executive of cross-town rival Roche (ROG.VX), escaped flak over his 16.7-million-franc remuneration at that company's annual general meeting on Monday, even earning praise for scrapping golden parachutes.

"I think that we pay excellent salaries, and bonuses as well," Humer said.

((Reporting by Sam Cage, editing by Leslie Gevirtz; zurich.newsroom@reuters.com; Reuters Messaging: sam.cage.reuters.com@reuters.net; +41 (0) 44 631 7457))

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