February 22, 2013 / 10:56 AM / 5 years ago

Novartis chairman Vasella says $78 mln payoff deal 'a mistake'

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BASEL, Feb 22 (Reuters) - Swiss drugmaker Novartis’s outgoing chairman Daniel Vasella told shareholders on Friday he had made a mistake in negotiating a $78 million pay-off, as he tried to quell public outrage ahead of a national vote on whether to impose strict limits on corporate pay.

The Basel-based drugmaker scrapped plans this week to pay Vasella 12 million Swiss francs ($13 million) annually for six years to stop him working for rivals, after news of the package sparked a fury of criticism by politicians and investors.

“The fierce reaction and reproaches that were made as a consequence of the many-sided discussions about my compensation did leave its mark on me,” Vasella said in his opening address to 2,688 shareholders gathered at Novartis’s annual general meeting in Basel.

“I made two avoidable mistakes: the first was to even negotiate this contract. And the second to believe that giving up this individual payment to charities would be considered as something positive by society.”

News of Vasella’s pay-off is widely seen as giving impetus to a referendum to give shareholders a binding say on shareholder pay and ban “golden handshakes” for new arrivals and “golden parachutes” for departing managers, like Vasella.

But scrapping the payment has done little to appease some investors, with activist shareholder group Actares urging shareholders to reject a so-called discharge for Novartis’s board for their performance last year in protest at their agreeing to the pay-off.

“Go give the board a hard time,” the driver of a packed number 14 tram told passengers heading to the shareholders meeting in Basel. ($1=0.9294 Swiss francs) (Reporting by Caroline Copley; Editing by Greg Mahlich)

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