Former Novartis chief Daniel Vasella's 2009 bonus will be close to three times the amount he would be due
based on relative earnings growth among large cap peers, a study showed on Wednesday.

The report, compiled by UK proxy voting agency Manifest and Swiss consultancy Obermatt, estimated his total 2009 bonus at 6.3 million Swiss francs ($5.96 million). That would be around 4 million Swiss francs above the maximum level calculated by Obermatt, which bases its bonus recommendation on the number of peers a company outperforms -- the more peers are beaten, the higher the bonus. The company was not immediately able to confirm the estimated bonus level for 2009.

"Dr. Vasella's base as well as total compensation is in line with that of CEOs from other large healthcare companies," a company spokesman said.
Vasella, a medical doctor, stepped down as chief executive of the Swiss drugmaker on Feb. 1 after 14 years, but remains chairman, and his remuneration of about 20 million Swiss francs has come under fire from the press and investors.

"The company needs to articulate to investors why they think it's appropriate to pay such a level of bonus when the economic performance of the company would not appear to justify it," Manifest Chief Executive Sarah Wilson told Reuters.

"It is shareholders' money after all and it is reasonable that they get some kind of explanation," she said.

However, investor group Ethos has welcomed the company's recent decision to give shareholders a vote on executive pay. Novartis's share price has struggled during Vasella's tenure,and has barely moved in a decade. It closed out 2009 at 56.5 Swiss francs, against 56.75 in May 2001.

The study, which measures estimated bonus payouts against core earnings, found Novartis was in the bottom quartile of a group of 91 global blue chip companies. Vasella should receive a bonus payout of 50% of target
bonus levels, it said.

Novartis has grown net sales to $44.3 billion in 2009 from $24.7 billion in 2003, while operating income has increased to more than $11 billion from $5.9 billion. Last year, growth in both sales and operating earnings was at 11%. Among peers which have already reported 2009 results, Astrazeneca reported growth at 26 percent and Roche at 8%.