Ethos Calls for Rejection of Novartis Executive Compensation at Annual General Meeting

The Swiss foundation Ethos has called on shareholders of the pharmaceutical giant Novartis to reject the proposed compensation for board members at the upcoming Annual General Meeting. At the center of the criticism is the compensation package for the CEO, Vasant Narasimhan, for the year 2025, which amounted to 24.9 million Swiss francs. According to the fund's statement, this amount represents a 30 percent increase compared to the previous year and is justified by the company, among other things, by achieving strategic operational and financial goals. The debate over the level of compensation for top executives in large corporations, especially multinational ones, is a constant element of discussions on corporate governance and social justice. In Switzerland, following a 2013 referendum, shareholders have the right to an annual vote on executive compensation (say-on-pay). Despite this, the salaries of CEOs of large companies, particularly in the pharmaceutical and financial sectors, often grow faster than the company's average wages or its profits. The Managing Director of Ethos, Vincent Kaufmann, expressed strong opposition. „«Wir befinden uns in einer Spirale kontinuierlich steigender Managergehälter, die losgelöst von der wirtschaftlichen Realität der Stakeholder multinationaler Unternehmen ist»” — Vincent Kaufmann. In its statement, the fund described Narasimhan's compensation as "particularly excessive." It was emphasized that this amount completely exceeds the accepted parameters and standards in Europe, and its rapid increase is not proportionally justified by the financial results available to all stakeholders. The Novartis CEO's compensation consists of a base salary, an annual bonus, and long-term equity-based incentive plans. Novartis CEO Compensation (Vasant Narasimhan): 2024: 19.15, 2025: 24.9 The Novartis Board of Directors justifies such a high amount by the effective implementation of strategy, the company's strong financial health, and maintaining its competitive market position. In a statement to the media, it was emphasized that the compensation is strictly linked to performance and value creation for shareholders. The matter will be decided during the Novartis Annual General Meeting, scheduled for March 4, 2026, in Basel. The vote on compensation matters is advisory (say-on-pay), meaning its outcome is not legally binding for the supervisory board, but it serves as a strong signal of the company owners' opinion. Ethos's recommendations carry significant weight, as the fund advises on voting matters for many institutional investors, including large pension funds that are significant shareholders of Novartis. This dispute fits into the broader European discussion on the limits of responsible compensation in times of economic uncertainty and growing societal expectations towards large corporations.