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| Roche CEO Severin Schwan |
The salary differences between top executives and the lowest-paid employees widened at 18 large Swiss companies last year, with pharma giants Roche ($RHHBY) and Novartis ($NVS) ranking high on the list of top offenders. That's the conclusion of a new report from Travail Suisse, an organization of trade unions.
The Travail Suisse report reveals that the top earners at Roche and Novartis are paid at least 200 times more than the lowest-paid employees, Bloomberg reports. That put them in the same league as Swiss giants Nestlé, UBS ($UBS) and Lindt & Spruengli when it comes to pay inequality, the report said.
Executive pay has been a hot topic in Switzerland, exemplified by a 2013 brouhaha over Novartis's plan to hand outgoing chairman Daniel Vasella a $78 million non-compete agreement. Novartis aborted that plan, just in time for a Swiss vote to limit executive pay.
And Swiss voters made it clear they would not tolerate so-called "fat-cat" pay packages in the future. A majority voted to outlaw signing bonuses, golden handshakes, and golden parachutes, and to give shareholders power over annual executive compensation.
The CEOs of Switzerland's two largest pharma companies certainly took home rich pay packages last year. Roche's Severin Schwan earned about $13.4 million, even as the company's massive restructuring claimed 1,000 jobs. And Novartis's Joe Jimenez took home $14.2 million, as the CEO battled against a declining vaccines business, quality-control problems at a U.S. plant, and the loss of patent protection on its blockbuster blood-pressure drug Diovan.
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| Novartis Chairman Joerg Reinhardt |
As Novartis' new chairman Joerg Reinhardt took office, the company promised a new era in executive pay; board member Pierre Landolt hinted at "significant reductions." After its latest shareholder meeting, Novartis said investors had approved reduced compensation for board members in 2015 and that it would look at ways to "better align" board compensation to that of other healthcare companies.
Last November, Swiss voters gave the thumbs-down to a proposal that would have limited CEO pay to no more than 12 times the salary of the lowest-paid employee. Travail Suisse's new report could very well re-open the debate over whether more needs to be done to keep a lid on rich CEO pay packages in Switzerland. "The fat-cat initiative certainly won't solve the problem," the organization said in a statement on its website, according to Bloomberg. "In the first year after its adoption the pay gap of the corporate management widened almost all over the country."
- here's the Bloomberg story
Special Reports: 15 Highest-Paid Biopharma CEOs of 2013 - Joe Jimenez - Novartis - Severin Schwan - Roche