SWITZERLAND - Socially-responsible manager Ethos says it will oppose the re-election of a senior official at the Swiss pharmaceuticals giant Novartis during the firm's annual shareholder meeting on March 6.

Ethos said it would oppose the re-election of Hans-Jörg Rudloff, head of the firm's executive compensation committee, because his appointment violates best-practice codes.

"It is unacceptable that the committee has raised the severance package for Daniel Vasella [Novartis' chief executive] and four other members of the company's board to five full years of pay from three previously," Ethos said. The company owns 1% of Novartis' shares.

"Such golden parachutes go against all rules of best-practice. As a result, Mr Rudloff, who is responsible for the compensation of executives, should not be re-elected," it said.

Ethos also took aim at the Vasella, saying that from a corporate governance standpoint, there was no justification for his acting as CEO and chairman of the firm's supervisory board. "The compensation for the supervisory board chairman also seems extraordinarily high," the fund manager added.

Ethos said that while it was not sure whether other big shareholders in Novartis would back its position, "the point is to send Novartis a clear signal about the failings of its corporate governance."

"Should Novartis reconsider its policy of executive compensation or how its senior posts are distributed, we would reconsider how we vote," Ethos said.

Novartis would not comment to IPE on Ethos' criticisms.

Launched in 1997, Ethos invests CHF2.3bn (€1.4bn) on behalf of 75 institutional investors. Pension funds figure prominently among these institutions.