The non-compete caused considerable ruckus for the drugmaker, which had not publicly disclosed the six-year agreement with Vasella and has been regularly chastised for the compensation awarded the departing executive (read here). The agreement angered shareholders and has figured prominently in an upcoming national referendum in Switzerland, where Novartis (NVS) is headquartered, that would give citizens a chance to decide whether shareholders should have more say in executive compensation (back story).
Had the non-compete deal not been leaked, “no one would have known about the gigantic sums you were talking about,” Dominique Biedermann, executive director of Ethos, a foundation that advises institutional investors on corporate governance issues, said at the Novartis shareholder meeting. “That leaves a very bad impression of how the board of directors works here. We had the impression none of you have the courage to stand up to” Vasella.
In an effort to mute expected criticism, Vasella indicated that he would donate the “net amount” he received from the non-compete deal to unspecified philanthropic activities. The implication was that he does not need the money. However, he may now have decided that an extra sum would be handy after all, assuming a consulting contract is signed. Then again, perhaps he will donate those proceeds.
We asked a Novartis spokesman whether Vasella would, in fact, do so and will update you accordingly.