BERLIN (AP) -- Swiss drugmaker Novartis AG has agreed with its outgoing chairman to scrap plans for a farewell non-compete deal that could have netted him up to 72 million francs ($78 million).
The announcement followed criticism from some of the Basel-based company's shareholders and Swiss politicians.
Daniel Vasella, who is stepping down later this month, announced Tuesday that he and the company had agreed to forgo a "non-compete" pay-out that many people found "unreasonably high."
"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," Vasella said in Tuesday's statement.
News of the deal, under which Vasella would have earned up to 12 million francs a year for six years for not advising Novartis' competitors over the coming years emerged last week. It was immediately met with a scathing response in Switzerland.
Among the critics were the company's shareholders and Justice Minister Simonetta Sommaruga, the head of the Swiss Bishops' Conference, and even the most business-friendly of Switzerland's governing parties, the Free Democrats.
Novartis said that granting the payout to Vasella, its chairman since 1999, had been intended to protect the company. It noted that he knows its business "intimately," built its research and development organization and personally recruited most of the top executives.
"We continue to believe in the value of a non-compete," vice chairman Ulrich Lehner said in a statement. But he added that the decision to drop the deal "addresses the concerns of shareholders and other stakeholders."
News of the deal came at a time when payments to executives are a particularly sensitive issue in Switzerland.
The country holds a referendum March 3 on a proposal to give shareholders a greater say on how much companies pay top executives. It would also ban "golden parachutes" — an agreement between a company and senior executive which gives the manager certain benefits if their employment is terminated.
A survey conducted mid-January by the polling group gfs.bern found 65 percent of voters backed the proposal, with 25 percent against and 10 percent undecided. The representative survey of 1,217 had a margin of error of 2.9 percent, gfs.bern said.