Novartis CEO Jimenez sees pay drop to $11.9M on Alcon, emerging markets shortfalls

Novartis ($NVS) CEO Joe Jimenez, like a few of his Big Pharma peers, saw his 2015 pay decline from 2014, and he has Alcon's troubles to thank for it.

Jimenez's 2015 compensation amounted to 11.6 million Swiss francs, or about $11.96 million. That's down from 12.65 million francs in 2014, as his cash incentive pay and annual equity awards both dropped by about 450,000 francs. His long-term share awards remained the same, as did his base salary.

With Novartis' overall sales coming in at slightly below target at $55.3 billion, emerging markets growth short of goal and market share also lagging--mostly because of currency effects, Jimenez didn't collect as much from his annual incentive arrangement.

Jimenez beat his goals in several other categories, the company's annual report says, particularly in his quest to squeeze costs out of Novartis' back-office operations. The new, centralized Novartis Business Services has delivered more than $3 billion in "productivity gains," handily beating a $2.75 billion target.

He also won props for new regulatory approvals; according to the annual report, Novartis racked up the largest number of FDA approvals in the industry, at 4 out of the industrywide total of 45. Those four included the much-anticipated heart failure drug Entresto and the first biosimilar drug in the U.S., Zarxio, a knockoff version of Amgen's ($AMGN) Neupogen.

Plus, Novartis closed on its multibillion-dollar deal with GlaxoSmithKline ($GSK)--in which it traded most of its vaccines business for GSK's oncology portfolio, plus set up a consumer health joint venture--and sold the rest of its vaccines to CSL.

Of course, the big news out of Novartis when it announced fourth-quarter results was a shortfall at Alcon. The eye-focused business brought in $2.3 billion for the fourth quarter, down 13% year-over-year, 6% in constant currencies. And operating income in the unit was just $132 million, down more than one-third even without forex effects. Jimenez detailed a series of problems responsible. He moved Alcon's underperforming slate of older eye drugs into Novartis' generics business, Sandoz, and brought in former Hospira CEO F. Michael Ball to take over--and turn around--the rest of the unit.

- see the Novartis annual report

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