After Novartis and Roche grew their sales last year, the Swiss pharma giants are handing their CEOs larger compensation packages for 2024.
At Novartis, CEO Vas Narasimhan’s overall 2024 pay increased by 6.9% at grant value, reaching 14.2 million Swiss francs ($15.7 million), according to the company’s annual report (PDF).
As for Roche CEO Thomas Schinecker, his 2024 remuneration reached slightly above 10 million Swiss francs ($11.1 million), representing a 4.6% increase from 2023, the company’s annual report (PDF) shows.
For Narasimhan, the biggest change in his pay package came from a long-term performance-based stock plan for the 2024-2026 cycle. That item alone was worth $7.5 million, versus $5.9 million granted a year ago for the 2023-2025 cycle. Novartis communicated the grant-value increase last year and “received strong support from shareholders,” according to its annual report.
Narasimhan can’t cash out on the stock awards yet. Instead, the actual payout, which may range between zero to double the target amount, will be determined after the three-year cycle ends. This means the awards could eventually be worthless if Novartis significantly underperforms by 2026. For example, after a pandemic hit for the company, Narasimhan only netted a 57% payout from the long-term grant in 2022.
Another major item in Narasimhan’s compensation, annual incentive pay based on Novartis’ 2024 business performance, declined by about 580,000 Swiss francs to about 4.5 million Swiss francs.
That is not say that the CEO didn’t do well during the year. The cash bonus marked a payout that was 160% of target as Narasimhan either met or exceeded every goal set in the performance scorecard used to evaluate the pay.
On the item called “maintain growth momentum and ensure successful launches,” Novartis’ board gave Narasimhan a “significantly above” evaluation. Last year, the company’s sales grew 12% year over year at constant exchange rates. Recently launched drugs Leqvio, Scemblix, Lutathera, Fabhalta and Pluvicto came in line with the board’s sales targets.
In 2024, Novartis signed 24 business development deals, although the company’s board noted that the $2.9 billion MorphoSys acquisition “has faced significant challenges.” This led to a mere “met” expectations assessment under the item of “deliver pipeline and drive R&D productivity,” despite more approvals and regulatory filings than targeted.
A few months after the MorphoSys buyout, Novartis said it had to table its filing plan for the BET inhibitor pelabresib, a major piece from the deal, because of a safety signal that requires longer follow-up time.
Moving on to Roche, Schinecker’s combined pay from two long-term, vest-over-four-years stock awards were almost identical at slightly below 3 million Swiss francs in both 2024 and 2023, the two years he’s been Roche’s helmsman.
Schinecker’s base salary increased by 7.5% to 3.2 million Swiss francs, and his bonus rose by 6.7% to 3.4 million Swiss francs. Starting in 2024, Roche’s CEO will receive the bonus in stock rather than in cash.
Last year, Roche’s sales climbed 7% at constant exchange rates, or 9% if COVID-19 products were excluded. The company’s bispecific eye injection Vabysmo continued its stellar launch, raking in 3.86 billion Swiss francs in sales. But the repeated failures of the TIGIT antibody tiragolumab, including in a high-profile non-small cell lung cancer test, formed a dark spot in the company's overall performance.
Throughout 2024, Roche counted 20 major approvals, including six from the U.S., as well as 72 new partnerships, including four acquisitions.
For 2025, Roche expects 12 key pivotal trial readouts, including four new molecular entities.