The Swiss are up in arms over executive pay again and, once again, Novartis ($NVS) executives are key exhibits in their case. This time, a fair-pay initiative will go up for nationwide vote, giving citizens the chance to weigh in on executive compensation.
As Swiss Info reports, Novartis' lowest-paid employee would have to work 266 years to earn the $17.1 million (15.7 million Swiss francs) that CEO Joe Jimenez earned in 2011. That's the largest wage gap reported by the trade union Travail Suisse in an annual survey. In third place was Novartis Chairman Daniel Vasella, whose 2011 compensation was 229 times the lowest-paid employee's salary, the union says.
FiercePharma's own research put Jimenez's 2011 compensation at $15.7 million, just about in the middle of the pack of pharma's highest paid CEOs. Vasella had been a perennial entry on the CEO pay list, hitting No. 2 in 2010 with $27 million, which included his $12.8 million retirement payout.Chairman Daniel Vasella
Novartis executives and their paychecks have been in the spotlight for several years, with unions, investor groups and others decrying the numbers before each annual meeting. Last year, the shareholder group Ethos campaigned against compensation committee members as a way to object to Vasella's 2011 compensation. In 2011, about 38% of shareholders gave a thumbs down to Vasella's 2010 package. And the year before that, a Swiss proxy advisor questioned Vasella's 2009 bonus of about $6 million.
Now, the vote goes to the Swiss citizenry. A ballot initiative up for vote March 3 would give shareholders the right to decide on compensation for directors, executives and advisory board members, the news service says. Golden handshakes and buyout bonuses would be verboten. If the initiative fails, an already-approved proposal that adopts some of the initiative's provisions would take effect.
"There is no economic justification for exorbitant executive salaries," Jean-Jacques Friboulet, professor for economic ethics at Fribourg University, told Swiss Info. The fast growth in executive pay shows that the market can't properly regulate compensation, Fribulet said, and that's why shareholders need the power to give a thumbs-down to executive pay.
- see the Swiss Info story
Special Reports: Joseph Jimenez - Novartis - Top 10 Pharma CEO Salaries of 2011 | Daniel Vasella - Top 10 Pharma CEO salaries of 2010