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Novartis, Vasella forgo non-compete

February 20, 2013 1:14 AM UTC

Novartis AG (NYSE:NVS; SIX:NOVN) said its board and Chairman Daniel Vasella, who is departing on Friday, agreed to forgo a non-compete agreement and all related compensation. Under the non-compete, Novartis would have paid Vasella up to CHF12 million ($13 million) annually for six years on the condition that Vasella "refrain from making his knowledge and know-how available to competitors." Vasella previously had said he planned to make the net amount -- CHF72 million ($78 million) -- available for philanthropic activities, but he said that shareholders and other stakeholders found the compensation to be "unreasonably high."

Novartis said it continues to believe in the value of a non-compete, but a spokesperson declined to speculate on whether the parties will renegotiate a new non-compete agreement. ...