Ethos recommends not to approve Novartis’ new remuneration system

Ethos considers that the variable remuneration of Novartis' CEO, Joe Jimenez, is excessive and recommends opposing the remuneration system at Novartis' AGM to be held on 22 February 2013. Ethos however commends the board's decision to propose a new executive remuneration system, effective on 1 January 2014.

Ethos Study on Executive remuneration: Positive impact of « Say on Pay »

The aggregate board and executive pay in the companies of the financial sector fell by 23% in 2011, while it rose by 5% in the other sectors. Ethos' study of the 2011 board and executive remuneration in the 100 largest Swiss listed companies also shows that 49 companies put their remuneration report to the advisory vote of the shareholders in 2012.

Ethos Survey on Executive Remuneration: Pay Raises in the Financial Sector

The total remuneration paid to the boards and the executive management of the Swiss listed companies included in the financial sector rose by 8%, while it remained stable in the other sectors. The 2010 executive remuneration survey of Ethos Foundation also shows that 56% of the companies under review implemented an advisory vote on their remuneration report at their 2011 annual general meeting, up from 38% in 2010.

Ethos recommends opposing the remuneration system of Novartis

Ethos cannot approve the remuneration system of Novartis put to the vote at the annual general meeting of the company to be held on 22 February 2011. Executive remuneration is not in the long term interests of shareholders. In particular, the variable remuneration of executive management is too high compared to the fixed remuneration. In addition, the various incentive plans are not described in sufficient detail to allow the establishment of a clear link between remuneration received and achievement of pre-defined performance targets.

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