Swiss drug giant Novartis AG (NVS: Quote) announced Friday that the majority of its shareholders have approved all resolutions proposed and recommended by its board of directors at its annual general meeting held in Basel earlier in the day.
The company noted that 2688 shareholders attended the meeting, which represented about 1.66 billion shares or 61.5 percent, of the almost 2.71 billion issued shares of Novartis.
Among the proposals approved were a sixteenth consecutive dividend increase, election of Joerg Reinhardt to the Novartis board effective August 1, 2013 for a three year term, and the proposed changes in compensation system for the CEO and the members of the Executive Committee, effective January 1, 2014.
The company increased its annual dividend for 2012 by 2 percent to 2.30 Swiss francs per share, payable with effect from March 1, 2013. The dividend represents a payout ratio of about 65 percent of net income from continuing operations.
Meanwhile, Reinhardt was elected to the Novartis board effective August 1, 2013 for a three year term, and is also designated to become Chairman of the Board on that day. The current Chairman Daniel Vasella stepped down at the meeting, and current Vice Chairman Ulrich Lehner will serve as interim chairman until Reinhardt assumes office.
The Novartis board thanked Vasella for his services and dedication to the company for the last 25 years and for leading it as either CEO or Chairman over the last seventeen years. The board has decided to elect Vasella as Honorary Chairman of the Board as an honor for his accomplishments.
"After 25 years with the company, the time is right for me to ensure a smooth transition. Dr. Joerg Reinhardt is a very experienced healthcare executive with deep knowledge of the company and the industry, and shares a clear commitment to innovation. I wish him much success in this new role," Vasella said in a statement.
Further, the shareholders elected Verena Briner, Charles Sawyers and William Winter to the Novartis board for three-year terms.
Meanwhile, the shareholders also approved, in a consultative vote, the proposed changes to the Novartis compensation system for the CEO and the members of the executive committee, effective from January 1, 2014.
The new compensation system creates strong alignment with shareholder interests and allows them to better evaluate long and short-term performance relative to objectives of the CEO and members of the executive committee in order to foster long-term value creation.
During the Annual General Meeting, Novartis CEO Joseph Jimenez also renewed the company's commitment to its strategy and strategic priorities.
In Friday's regular trading session, NVS is currently trading at $68.77, up $0.05 or 0.07% on a volume of 0.14 million shares.
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by RTT Staff Writer
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