Ethos rejects Novartis CEO, management pay as excessive

ZURICH, Feb 24 (Reuters) - Proxy advisory firm Ethos on Tuesday urged shareholders of Novartis NOVN.S to reject pay-related items at the pharma company's upcoming annual general meeting, calling the 2025 remuneration for CEO Vasant Narasimhan "particularly excessive".

Narasimhan received a 24.9 million Swiss franc ($32.12 million) compensation package for 2025, up 30% from the previous year, driven by a three-year share price increase of 64%.

Ethos said although Novartis performed well financially in 2025, with profits up 17%, such compensation went too far, noting the CEO's variable remuneration for 2025 was worth 22.3 million francs, or 11.8 times his base salary.

Novartis said that its compensation framework is directly linked to the company's short and long-term performance and the shareholder value that is created.

Ethos calculated that among CEOs of the ten largest companies on the Swiss stock exchange, Narasimhan's pay is more than 50% above the median. The gap widens to 80% when compared with the 15 largest European healthcare firms.

"We regret that Novartis has chosen to compare itself mainly with North American companies when setting the remuneration of its executives," said Vincent Kaufmann, CEO of Ethos.

Kaufmann said while it is understandable that a company the size of the Basel-based Novartis may pay relatively high salaries in order to retain top talent, he argued the levels reached in recent years were excessive and hard to justify.

Ethos also recommended voting against the remuneration requested for the members of the executive management for 2027 and for the board of directors at the AGM on March 6.

The remuneration for the board of directors is significantly higher than that for the boards of the ten largest Swiss companies by market capitalisation, Ethos said.

($1 = 0.7753 Swiss francs)