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Novartis, the Swiss drug maker has agreed with its outgoing Chairman Daniel Vasella to cancel a much-debated golden handshake deal which enraged shareholders for its size and duration.
Vasella who announced his resignation in January, was to receive 72 million Swiss francs ($78m, £50m) over the next six years to continue advising Novartis and not to disclose information of the Swiss pharmaceutical group to competitors.
He steps down as chairman at the Novartis Annual General Meeting on 22 February.
"The Board and Dr. Vasella agreed to cancel the non-compete agreement and to forgo all compensation linked to his non-compete," said vice chairman Ulrich Lehner, who will succeed Vasella on 1 August.
"We continue to believe in the value of a non-compete, however, we believe the decision to cancel the agreement and all related compensation addresses the concerns of shareholders and other stakeholders."
"I have understood that many people in Switzerland find the amount of the compensation linked to the non-compete agreement unreasonably high, despite the fact I had announced my intention to make the net amount available for philanthropic activities. That is why I have recommended to the Board that I forgo all payments linked to the non-compete agreement," Vasella said in a statement.
The scraping of the scheme comes after a campaign by some of the company's shareholders such as Geneva-based Ethos Fund and criticism from Swiss politicians, who said the amount is extremely high.
Vasella previously faced much shareholder criticism over his pay, as he stood for re-election. He himself was a member of the company's remuneration committee, according to its annual report.
Swiss politicians were of the view that such big payouts cannot be justified as they undermine public trust in the entire economy. Switzerland is set to go for a referendum on 3 March over whether to ban the said "golden hellos" and "golden parachutes", and whether to give shareholders veto over excessive executive pay.