Ethos slams Novartis pay: CEO salary 'excessive'

Context

In brief

• Ethos criticizes Novartis CEO and top management compensation
• Judgment: excessive wages compared to company results
• Swiss foundation calls on shareholders to vote against remuneration

Key Facts

• What: Ethos' critique of Novartis' compensation
• Who: Ethos Foundation (Swiss Ethical Investors)
• Where: Switzerland (Novartis headquarters in Basel)
• Why: Disproportion between salaries and company performance
• Target: Novartis CEO and top management

The Swiss foundation Ethos, which represents ethical investors with assets under management of more than 200 billion francs, has expressed a sharp criticism of the remuneration of Novartis' top management. According to Ethos, the salaries of the CEO and top management of the pharmaceutical multinational are often excessive compared to the results actually achieved by the company.

The invitation is explicit: shareholders should vote against the remuneration proposal at the next general meeting. Ethos, which holds stakes in several Swiss blue chips, is no stranger to this type of stance: its mission is precisely to promote transparent and sustainable corporate governance, aligned with the long-term interests of small investors.

The Swiss context and cross-border commuters Novartis, headquartered in Basel, is one of Switzerland's largest companies in terms of turnover and employment. Although it does not have a direct operational headquarters in Ticino, its influence also extends to the cantonal territory, where many production and research companies collaborate with the group. For cross-border commuters working in Swiss companies, even in sectors other than pharmaceuticals, the news raises an interesting reflection: how are the remuneration of top management determined and what are the criteria of fairness with respect to employees and, in particular, cross-border workers?

The discussion of fair wages is not new in Switzerland, where the gap between managers' and employees' salaries is often at the center of public debate. For a cross-border commuter who receives an average salary in the Canton of Ticino, understanding these mechanisms can be useful to frame his salary positioning within the Swiss business context.

Operational details

Analysis: Salaries and Impact on Cross-Border Workers

Ethos’s criticism of Novartis’s compensation is not an isolated case but part of a broader trend where Swiss ethical investors closely monitor the compensation policies of major Swiss companies. The foundation, in particular, assesses executive pay based on criteria such as company performance, long-term sustainability, and alignment with shareholders’ interests.

For a cross-border worker employed in Switzerland, this issue offers insights into at least three practical aspects:

1. Transparency and Fairness in Compensation

In Switzerland, publicly traded companies are required to disclose top management salaries, but transparency does not always extend to intermediate pay levels. For cross-border workers, understanding how salaries are structured — from base to top executive — can be useful when negotiating their own position. Tools like the net salary calculator allow comparisons between individual earnings and industry averages, considering factors such as seniority, role, and performance.

2. Company Performance and Variable Pay

Ethos highlights how Novartis’s CEO compensation is linked to performance targets. This mechanism, common in Switzerland, often influences employee pay too, where part of the salary can be variable (bonuses, profit sharing). For cross-border workers, it’s important to verify whether their contract includes variable components and what criteria are used to attain them. In this context, understanding Swiss tax regulations is crucial, since bonuses and profit shares may be taxed differently than fixed salaries.

3. Comparing with the Italian Market

A cross-border worker in Ticino often compares their salary to what they would earn in Italy for the same role. Ethos’s critique of excessive Swiss top management pay can serve as an opportunity to reflect on the added value that a Swiss company offers compared to an Italian one: not just in terms of salary, but also stability, benefits, and career opportunities. In this regard, tools like the cost of living comparator help frame the real economic advantage of cross-border employment.

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Key points

What cross-border workers can do: action and useful tools

The criticism from Ethos regarding Novartis executive compensation is a wake-up call that encourages all workers — including cross-border commuters — to inform themselves and take action to protect their salary interests. Here are some concrete steps that a cross-border worker can take:

Check your payslip

The first step is to analyse the structure of your salary. In Switzerland, the payslip (or Lohnabrechnung) provides detailed information on:

• Base salary
• Variable components (bonuses, 13th month, profit-sharing)
• Social contributions (AVS, LPP, LAMal, accident insurance)
• Withholding taxes (for cross-border workers with a G permit)

Using the payslip simulator allows you to verify that all elements are correctly calculated and that there are no errors in tax or contribution deductions.

Compare with industry averages

The second step is to compare your salary with the sector averages in the Canton of Ticino. Tools like the net salary calculator provide up-to-date insights on:

• Average salaries by role and seniority
• Differences between sectors (pharmaceutical, financial, manufacturing, etc.)
• The impact of Swiss taxation on your net pay

This comparison is also useful for negotiating a raise or evaluating a job offer, whether in Switzerland or Italy.

Monitor company general meetings

Finally, for those working in publicly listed companies (such as Novartis), it can be interesting to follow the annual general meetings of shareholders. These meetings often discuss and vote on executive compensation policies. Even though cross-border workers are not shareholders, understanding these dynamics helps frame the corporate context in which they operate.

Frontaliere Ticino tools

To explore all these aspects in depth, Frontaliere Ticino offers a range of useful resources:

• Net salary calculator to simulate your net pay
• Cost of living comparator to assess the real economic advantage of working in Switzerland
• Guide to cross-border permits to check the rights and obligations linked to the G permit