Daniel Vasella has a new exit package, and at a total of 5 million francs, it's a small fraction of the 72 million originally approved by the Novartis ($NVS) board. But at a time when executive pay is under the microscope in Switzerland, some watchdogs are still unhappy.
Vasella, who stepped down as chairman earlier this year, has stuck around, providing "certain transitional services," the company said in a statement. He'll stay through October to help "support" incoming chairman Joerg Reinhardt. For that work, Vasella will receive 2.7 million francs in cash, plus 31,724 Novartis shares, now worth about 2.2 million francs. Total: 4.9 million francs, or about $5.2 million.
And Vasella has the opportunity to earn more--a guaranteed minimum of $250,000 per year for 2014, 2015 and 2016. He'll be available to provide consulting services, "such as the coaching of high potential associates of Novartis and speeches at key Novartis events," the company said. Rate of pay: $25,000 per day.
"We are pleased that we will be able to call on Daniel Vasella's services and to have the opportunity to benefit from his knowledge and long-term experience in shaping a global healthcare leader," Novartis interim chairman Ulrich Lehner said in a statement.
Vasella has long been a lightning rod for complaints about executive pay in his home country. After all, he often topped rankings of highest-paid Swiss CEOs. So, his exit package was destined to draw scrutiny.
Boy, did it. News of his hefty, 5-year noncompete agreement emerged just as the Swiss prepared to vote on new executive-pay restrictions. Vasella's deal helped galvanize support for those curbs, which voters approved handily. Vasella had already said he would forgo the $78 million deal, but Novartis shareholders staged protests of their own at the company's annual meeting.
Unsurprisingly, pay watchdogs took shots at Vasella's latest compensation package. "We are astonished; we think it's exaggerated," Dominique Biedermann, the chief executive officer of Geneva-based Ethos, told Bloomberg. "A manager who leaves is gone. We don't understand why Mr. Vasella needs to stay on as a consultant for another three years."
Now, though, Vasella can take comfort in company. Novartis' current CEO, Joe Jimenez, has already drawn fire in Switzerland for his $14 million compensation package.
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