Dr Vasella was due the compensation under a non-compete agreement which would have prevented the departing chair from revealing confidential information about the company.
However, the size of the non-compete compensation package has caused outrage amongst the general public in Switzerland and company shareholders – despite Dr Vasella claiming the money was planned for philanthropic activities.
“I have understood that many people in Switzerland find the amount of the compensation linked to the non-compete agreement unreasonably high, despite the fact I had announced my intention to make the net amount available for philanthropic activities,” he said. “That is why I have recommended to the Board that I forgo all payments linked to the non-compete agreement.”
Novartis interim Chair Professor Dr Ulrich Lehner said the Swiss-based company “continues to believe in the value of non-compete” but cancelled Dr Vasella’s agreement after concerns were raised by the company’s shareholders. “We believe the decision to cancel the agreement and all related compensation addresses the concerns of shareholders and other stakeholders.”
Dr Vasella is set to leave Novartis after 17 years with the company. He decided against standing for re-election at the company’s AGM at the end of February and will be replaced by Bayer HealthCare CEO Dr Jörg Reinhardt.