- ISS recommends approval of a 17% increase in 2006 dividend payment, election of Marjorie Yang to Board and re-election of Daniel Vasella and Hans-Joerg Rudloff
Basel, February 26, 2007 -The leading proxy advisory firm Institutional Shareholder Services (ISS) has issued a report recommending that Novartis shareholders support all proposals put forward by the Group's Board of Directors for approval at the next Annual General Meeting, which is scheduled for March 6.
The report by ISS, considered one of the world's authorities on proxy issues and corporate governance, expressed support for all seven of the Board's proposals requiring a vote at the meeting, including the approval of a 17% increase in the dividend payment for 2006 and a discharge of the Board and senior management.
ISS also recommended that Novartis shareholders vote in favor of the election of Marjorie Yang to the Board of Directors as well as the re-election of Dr. Daniel Vasella and Hans-Joerg Rudloff to the Board, all for three-year terms. Other proposals include accepting the financial statements and reports for 2006 and also ratifying PricewaterhouseCoopers AG as auditors.
The report concluded that Novartis complies with most of the non-binding recommendations in the Swiss Code of Best Practice of Corporate Governance. It specifically noted that Novartis provides in its annual report detailed information on individual Board member shareholdings, the components of compensation and performance criteria for equity-based compensation which exceeds the requirements mandated by regulations.
The ISS report remarked on the high level of independence of the board's committees: "The board's Audit and Compensation Committees are fully independent, i.e. they do not include any executive or non-independent non-executive directors. The Nominating Committee is also composed of a majority of independent non-executive directors. The level of independence on the board's committee exceeds best practice for Switzerland."
The Board of Directors proposes a dividend payment of CHF 1.35 per share for 2006, up from CHF 1.15 in 2005. This increase marks the tenth consecutive higher payout per share since the creation of Novartis in December 1996. The payment date for the 2006 dividend has been set for March 9, 2007.
ISS is a subsidiary of RiskMetrics Group (RMG), a provider of financial risk management analytics. Founded in 1985, ISS provides proxy research, voting services and corporate governance advisory services to financial institutions and corporations worldwide.
Disclaimer
The foregoing release contains forward-looking statements that can be identified by terminology such as "proposes," "recommended," "is recommending," "will," "proposed," or similar expressions, or by express or implied discussions regarding potential future dividend payments by Novartis. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results to be materially different from any future results, performance or achievements expressed or implied by such statements. There can be no guarantee that Novartis will be pay its shareholders any dividends, or any particular level of dividends this year, or in the future. In particular, management's expectations could be affected by, among other things, unexpected regulatory actions or delays or government regulation generally; unexpected clinical trial results, including additional analysis of existing clinical data, and new clinical data; industry, government, and general public pricing pressures; the company's ability to obtain or maintain patent or other proprietary intellectual property protection; competition in general; and other risks and factors referred to in Novartis AG's current Form 20-F on file with the US Securities and Exchange Commission. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, believed, estimated or expected. Novartis is providing the information in this press release as of this date and does not undertake any obligation to update any forward-looking statements contained in this press release as a result of new information, future events, or otherwise.
About Novartis
Novartis AG (NYSE: NVS) is a world leader in offering medicines to protect health, cure disease and improve well-being. Our goal is to discover, develop and successfully market innovative products to treat patients, ease suffering and enhance the quality of life. We are strengthening our medicine-based portfolio, which is focused on strategic growth platforms in innovation-driven pharmaceuticals, high-quality and low-cost generics, human vaccines and leading self-medication OTC brands. Novartis is the only company with leadership positions in these areas. In 2006, the Group's businesses achieved net sales of USD 37.0 billion and net income of USD 7.2 billion. Approximately USD 5.4 billion was invested in R&D. Headquartered in Basel, Switzerland, Novartis Group companies employ approximately 101,000 associates and operate in over 140 countries around the world. For more information, please visit
http://www.novartis.com.
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Novartis Media Relations
John Gilardi
Novartis Global Media Relations
+41 61 324 3018 (direct)
+41 79 596 1408 (mobile)
Corinne Hoff
Novartis Global Media Relations
+41 61 324 9577 (direct)
+41 79 248 5717 (mobile)
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