Ethos advisory firm rejects Novartis CEO's compensation as excessive

Swiss shareholder advisory firm, Ethos, has issued sharp criticism of the compensation for the CEO of Novartis, Vasant Narasimhan. In a statement published on Tuesday, it called on shareholders to reject the proposed executive compensation packages that will be voted on at the upcoming annual general meeting. Narasimhan's compensation package for 2025 amounted to 24.9 million Swiss francs, which translates to approximately 32.1 million US dollars. This amount represents a 30% increase compared to the previous year. The debate over the compensation of top executives at large corporations, especially in the pharmaceutical and financial sectors, has been ongoing in Europe for at least two decades. Following the 2008 financial crisis, many countries, including Switzerland, introduced regulations aimed at increasing transparency and giving shareholders a vote on executive pay (so-called say-on-pay). Despite these mechanisms, the amounts received by CEOs of large conglomerates continue to rise, often faster than company profits or the wages of average employees. Ethos director, Vincent Kaufmann, commented on the situation in strong terms. „«Wir befinden uns in einer Spirale kontinuierlich steigender Managergehälter, die losgelöst von der wirtschaftlichen Realität der Stakeholder multinationaler Unternehmen ist»” — Director of the Swiss shareholder advisory firm Ethos. Ethos deemed the compensation of the American manager of Indian origin as "particularly excessive" and completely beyond European parameters. Compensation of Novartis CEO Vasant Narasimhan: 2024: 19.15, 2025: 24.9 The advisory firm emphasizes that its criticism concerns not only the absolute amount but also the pace of its increase, which in its view is not justified by the company's results available to all stakeholders. Ethos's recommendation is crucial ahead of Novartis's March annual general meeting, as many institutional investment funds follow such opinions when making voting decisions.

Perspektywy mediów: The media left and part of the center may present the case as an example of unbridled corporate greed and growing income inequality, undermining the social contract. Conservative commentators and business press may argue that high compensation is necessary to attract and retain the best managerial talent in the global market, and the decision belongs solely to shareholders.