Compensation and benefits

Talented teams, performance-based compensation

The success of Novartis depends on the performance and dedication of our Group company associates. We strive to be an employer of choice that attracts, retains and motivates talented and performance-driven people to our affiliates around the world.

Our performance-based compensation policy applies to all associates of Novartis Group companies and is designed to:

• Align the objectives of associates with the interests of our shareholders
• Incentivize associates to create sustainable value for Novartis and its shareholders
• Support a diverse and performance-oriented culture that allows Novartis to reward people who perform well
• Be competitive with world-class companies and industry peers

Base compensation
Each associate is given a fixed salary based on job characteristics, market competitiveness and the associate’s skills. Salary growth depends on the associate’s individual performance and level compared to the benchmark.

Variable compensation
Novartis Group companies have three variable compensation plans:

Annual incentive plans
Most associates participate in annual incentive plans. Under these plans, awards are given each year based on the associate’s individual year-end performance rating as well as on the Group’s or business area’s performance.

Novartis Equity Plan “Select”
Annually, approximately 10 percent of associates worldwide receive equity grants under the Novartis Equity Plan “Select.” Participants in this plan can elect to receive their incentive in the form of shares, share options or a combination of both.

Long-Term Performance Plan
The Novartis Long-Term Performance Plan rewards key executives who have a significant impact on the long-term success of the Group.

Benefits
Novartis benefits programs are an integral part of the total compensation policy and strategy and are designed to meet the challenges of growing, global competition for talent.

These programs support the overall business objectives and strategy of Novartis. Benefits are aligned with local legislation and practices in each country and are established to provide a framework of security for associates.