Frequently Asked Questions

Top 10 questions from our investors

Last updated: May 03, 2023

How does your Board assess risks?

• Risk is an important topic for our Novartis Board and is regularly assessed in a systematic process and by various committees.
• Our Chief Ethics, Risk and Compliance (ERC) Officer updates the Board once a year and the Audit & Compliance Committee twice a year on risk management issues.
• The Chief ERC Officer is a permanent attendee of the Risk Committee (RC) and the Audit and Compliance Committee (ACC) and plays an active role with the RC Chair in shaping the Board agenda regarding risk. The RC regularly receives updates from Chief ERC Officer and Global Head of Risk & Resilience on enterprise risk management mitigation measures and results.
• As part of its primary responsibilities, the RC oversees the risk management system and processes, reviews the prioritization and handling of risks, the risk portfolio, and actions implemented by management. The Committee is also responsible for fostering a culture of smart risk-taking and investigating key risk areas. After each meeting of the Risk Committee, the RC Chair debriefs the Board on its actions and learnings.

What is your approach to over-boarding at Board level?

• Novartis actively engages with shareholders on over-boarding concerns and we note the diverse approaches to assessing overboarding which include time spent on commitments and number of mandates.
• We review the external mandates of our Board members regularly and ensure that they are compliant with the Novartis articles of association, which allow for up to four additional mandates in other listed companies (whereas chair positions count as two mandates). Any potential mandate in listed and non-listed companies requires pre-approval, where Novartis assesses the overall mandates of a Board member as well as potential conflicts of interest.
• Additionally, we pay close attention to time spent on external commitments and time required for travel and the attendance record of our Board members.

What is the Board’s approach to diversity and have you recently appointed a diverse Board member?

• Novartis meets the threshold of 30% female representation on the Board of Directors and gender equity is one of the criteria we consider in our commitment to Diversity, Equity, and Inclusion. Our most recent female Board member is Ana de Pro Gonzalo.
• We have recently welcomed a new member to the Board of Directors following a strict succession planning process and the criteria of diversity, professional experience and set of competences that the Board currently requires. John Young brings the profile that fits with the current Board skills matrix and the constitution structure (supporting the governance for the Board and its Committees). Board succession planning will continue to ensure the most effective succession plans for the future and continue to consider diverse candidates.

Can you provide details regarding approach to Sandoz compensation?

• The Executive Compensation structure for Sandoz will retain key principles of the Novartis Executive Compensation structure, such as benchmarking against the relevant companies for Sandoz, ensuring strong linkage between pay and performance, transparent performance metrics, and alignment with external market best practices in Executive Compensation.
• We will provide more details closer to the date of spin-off.

What are your efforts on biodiversity and what progress have you made?

• Novartis is committed to exploring efforts to improve biodiversity as it represents an important source of potential new drugs to Novartis.
• Existing work related to biodiversity includes our efforts on reducing water consumption and ongoing efforts to reduce PMI (process mass intensification) and carbon emissions in creating active pharmaceutical ingredients.
• Novartis recognizes the growing demand and need for companies to both assess and disclose their impacts and dependencies on nature (e.g. COP15 Kunming-Montreal Global biodiversity framework, Taskforce on Nature Related Disclosures (TNFD), inclusion of Biodiversity disclosure questions in CDP, GRI, etc.).
• In 2023, Novartis is aiming to conduct a biodiversity/nature risk assessment of its operations, develop a biodiversity/nature strategy and roadmap, and draft disclosures.

Do you aim to reduce animals needed for R&D?

• In 2022, Novartis recognized 3Rs (replacement, reduction and refinement of animal experimentation) award winners and launched a new 3Rs Innovation Grant Program to fund research projects that validate alternatives, reduce animal numbers, and refine the animal experience. Projects include exploring the use of microphysiological systems for safety assessments, organoid development for early discovery research, and using new home cage monitoring technologies for better animal experience.
• Novartis has implemented various initiatives to reduce the number of animals used in research, such as:
  • 86% reduction in the number of animals via cross-divisional collaboration for Amyotrophic Lateral Sclerosis (ALS) model
  • Exhaust air dust analysis replaced up to 60% of sentinel animals to maintain rodent health
  • 80% animal reduction for nerve regeneration studies through artificial intelligence screening
  • 10-fold animal reduction for ophthalmology study via adoption of a novel study design
  • Novel human cell-based in vitro tests used as a replacement for mice in a rheumatoid arthritis study
  • Luciferase labelled cancer cells used to reduce number of mice for metastasis study

How are you addressing the gender/racial pay gap?

• As part of our commitments, we monitor the pay gap on an annual basis. The results of the 2022 data analysis will become available in Q2 2023. The latest published pay gap analysis results are available in the Novartis in Society Integrated Report.
• As part of our EPIC pledge in 2018, we have committed to positively influence the overall pay gap by 2023.
• In the US, Novartis conducts annual pay equity reviews based on gender and race/ethnicity as required of all federal contractors at each of our US sites to ensure equal pay for similar work. Novartis also advocates for pay transparency in the US and now discloses salary ranges on all job adverts.
• To address the gender pay gap caused by unequal representation, we strive for gender balance in management and equal pay for equal work. Our management recruitment process includes diverse candidates and selection panels, and we’re working towards eliminating historical salary data.

What actions is Novartis taking on managing AMR risks?

• Novartis supports the scientific consensus on AMR and focuses on four key areas to tackle the issue:
  • Responsible Manufacturing to prevent antibiotics entering the environment
    • Novartis is committed to the proper use of resources, optimal hygiene and safe waste disposal throughout the value chain. Novartis works with coalitions including the AMR Industry Alliance and the CEO Water Mandate to advancing water stewardship.
    • In 2021, Novartis announced an investment of more than EUR 100 million in new manufacturing technology for production of oral amoxicillin active pharmaceutical ingredient (API) at Kundl, Austria. In 2022, this investment was increased by EUR 50 million to further upgrade technology and processes in Kundl to increase manufacturing capacity, bringing the antibiotics network investment in Europe to over EUR 250 million.
  • Responsible Access to high-quality, affordable antibiotics
    • Novartis efforts in access are recognized by the Access to Medicine Foundation in its bi-annual AMR Benchmark report, which ranked Novartis fourth out of eight large research-based companies.
  • Responsible Use ensuring prescription of the right antibiotic at the right dose for the right indication
    In 2022, Novartis signed a partnership with the Ecumenical Pharmaceutical Network focused on Kenya, Malawi, Nigeria to:
    • Strengthen antibiotic stewardship and infection management in health facilities.
    • Increase accountability, monitoring and surveillance of antibiotic prescription and supply; and
    • To advocate antimicrobial stewardship and implement improved waste management of antibiotics in at least one of the three countries.
• Novartis is also ensuring educational activities, leveraging ubiquitous smart-phone technology (MedShr) and storytelling, tailored for Community Healthcare Workers (Healthy Family) and Pharmacists (Commonwealth Pharmacists Association) in the most rural areas of developing countries.
  • ​​​​Responsible Innovation
    • Novartis seeks active exploration of innovation opportunities through partnerships and networks, including collaboration with the AMR Industry Alliance.
    • Novartis supports the AMR Action Fund to develop two to four new antibiotics by 2030.

Can you comment on some of your recent efforts to promote diversity at Novartis?

• Our DEI programs are globally governed and reviewed on a regular basis for its progress. Gender equity is an important part of our DEI strategy with women representing 47% of our overall management, compared with 46% in 2021, and 42% five years ago. In 2022, we were recognized for our progress through the Stonewall Top Global Employer Silver Award and Bloomberg Gender Equality Index.
• In 2020, Novartis launched our Multicultural Engagement Program (MEP) to strengthen our inclusion efforts and ensure engagement – and improve retention – of ethnically and racially diverse employees later expanding to include Hispanic employees in 2021. We partner with external organizations including the Center for Disability Integration at the University of St Gallen, to identify and develop best practice solutions for disability inclusion.
• We have 80+ dedicated employee resource groups connecting employees with shared experiences/backgrounds. We also support the UN Standards of Conduct for Business to tackle discrimination against LGBTQI+ employees and are members of the International Labor Organization’s (ILO) Global Business and Disability Network.

How are you engaging with your suppliers to ensure they meet expected standards of behavior?

• We established a third-party risk management (TPRM) framework to help identify and manage risks when interacting with third parties. In April 2022, we extended our TPRM program to perform risk assessments on wholesalers and distributors in addition to vendors and suppliers.
• Third parties are audited, and subsequent remediation actions (where required) as defined by the relevant Risk Function. A re-assessment of each third party is triggered every three years.
• In January 2023, we updated our Third-Party Code to further specify human rights due diligence and environmental sustainability expectations from third parties. Our Third-Party Code is consistent with the Pharmaceutical Supply Chain Initiative principles for responsible supply chain management.

What is the new cost basis of my Novartis and Alcon shares following the spin-off of Alcon from Novartis?

Information about allocation of tax basis for U.S. holders may be found in the Form 8937: Basis of Securities (PDF 0.1 MB). With regard to non-U.S. holders, please note that the allocation of tax basis for Novartis and Alcon shares following the spin-off depend on the applicable local tax provisions and each shareholder’s individual circumstances. Accordingly, all shareholders and ADR holders are asked to consult their own tax advisor regarding the tax basis allocation calculations.

What are the income tax implications to Canadian shareholders due to the Alcon spin-off?

The following documents include the Finance Canada and Canada Revenue Agency comfort letter, Canada income tax guidelines and tax election letters related to the Alcon Spin-off for Canadian resident shareholders:

Canada Income Tax Alcon Spin-off FAQ - English (PDF 0.1 MB)

Canada Income Tax Alcon Spin-off FAQ- French (PDF 0.1 MB)

Department of Finance Canada Comfort Letter (PDF 0.1 MB)

Download the Canada and Quebec Tax Election Example Letters (ZIP 0.1 MB)

 

Where are Novartis shares traded?

Novartis shares are listed and traded on the SIX Swiss Exchange (Valor No. 001200526, ISIN CH0012005267, symbol: NOVN) as well as on the NYSE in the form of American Depositary Receipts (ADR) (Valor No. 567514, ISIN US66987V1098, symbol: NVS).

What are the ticker symbols for Novartis?

Shares	SIX (Reuters / Bloomberg)	NOVN.S / NOVN SW
ADRs	NYSE (Reuters / Bloomberg)	NVS / NVS US

What is an ADR/ADS?

ADR stands for American Depositary Receipt. ADS stands for American Depositary Share. An ADR is a receipt for a number of shares of a foreign-based corporation held by a US depositary bank, entitling the ADR holder to all dividends and capital gains.

What is the number of outstanding shares in Novartis?

Key Novartis share data

Calculated on the weighted average number of shares outstanding

	2022	2021	2020
Issued shares	2 403 721 252	2 434 420 920	2 467 060 920
Treasury shares1	284 112 195	199 480 972	210 238 872
Outstanding shares at December 31	2 119 609 057	2 234 939 948	2 256 822 048
Weighted average number of shares outstanding	2 181 180 341	2 242 601 173	2 277 041 940

1. Approximately 99 million treasury shares (2021: 102 million; 2020: 103 million) are held in Novartis entities that restrict their availability for use.

What is the number of outstanding ADRs in Novartis?

Key data on ADRs issued in the US

	2022	2021	2020
Year-end ADR price (USD)	90.72	87.47	94.43
Number of ADRs outstanding1	225 435 680	269 891 321	288 755 853

1. The depositary, JPMorgan Chase Bank, N.A., holds one Novartis AG share for every ADR issued.

When is your dividend going to be paid?

The dividend payment date has been set for March 13, 2023.

What is the dividend history for Novartis shares?

Shareholders approved the 25th consecutive dividend increase to CHF 3.10 (+3.3%) per share for 2021 at the Annual General Meeting on March 04, 2022.

Learn more about dividend information

What is the amount and timing of the next dividend payment?

The Novartis Board of Directors will propose a dividend of CHF 3.20 per share to the shareholders for approval at the Annual General Meeting to be held on March 07, 2023.

If this proposal is approved, the dividend will be paid as from March 13, 2023. The last trading day with entitlement to receive the dividend is March 08, 2023. As from March 09, 2023, the shares will be traded ex-dividend.

Is the dividend on the Novartis ordinary share and the Novartis ADR the same?

Yes, however, since ADR holders will receive their dividend in US dollars, the amount received will be impacted by currency exchange rates, as well as by a handling fee (historically, $0.01 per share) associated with the ADR dividend. An estimate of the amount of the US dollar dividend for the ADR will be calculated on the day of the dividend announcement based on that day’s exchange rates. The actual exchange rate will be determined once all funds are received and exchanged by J.P. Morgan, the depositary bank.

Since 2019, Novartis’s dividend to ADR holders will be paid in two stages. The first payment will be equal to 65% of the payout, payable one week after Swiss payment date. Those holders reclaiming withholding tax will receive a second payment once the reclaim process is completed.

Will the rate recently announced for the ADRs change between now and the ADR payment date?

Yes, the preliminary announcement only provides an estimated rate based on a current FX rate. The actual rate will be determined when the Swiss Francs are converted to US dollars on the Swiss payment date once all the funds are received by J.P. Morgan, the Depositary.

When will the remainder of the funds be converted and paid to the ADR holders?

The remainder of the funds due to ADR holders will be converted only after a tax reclaim has been completed and once any such reclaimed funds have been received by J.P. Morgan from the Swiss Tax Authorities. Once the funds are received and converted into US dollars a payment will be made shortly thereafter to any ADR holders entitled thereto. From previous years, we can expect tax reclaim funds to be distributed to ADR holders six to seven weeks after the Swiss payment date.

Will the entire dividend amount be converted into US dollars on the Swiss payment date of March 13, 2023?

On the Swiss payment date only 65% of the dividend is received. This amount will be converted into US dollars and paid on the ADR payment date of March 20, 2023.

Why can’t J.P. Morgan receive all of the funds on the Swiss payment date?

The Swiss Tax Authorities require that a tax reclaim be completed prior to each payment for any amounts due above and beyond the non-treaty amount. Investors must certify and elect their entitlement and provide necessary disclosure documentation as required by the treaty between the US and Switzerland based upon their tax status.

Why does it take so long to get the reclaim funds back from the Swiss Tax Authorities?

Holders of ADRs entitled to receive the dividend are not able to elect until after the ADR record date which is just one (1) day prior to the Swiss payment date. Eligible holders of ADRs are given 10 days to complete and submit their election. Once any reclaims are submitted to the Swiss Tax Authorities it takes approximately 15 days for such authorities to process the reclaim.

Will another announcement be made once the tax reclaim funds are received?

No, the funds will be converted and paid to the holders.

How does the tax reclaim process work?

There is a process for banks and brokers within Depositary Trust Company to elect their clients’ correct tax status electronically and to provide documentation on behalf of their clients. J.P. Morgan elects on behalf of registered holders based upon their tax status. Please contact J.P. Morgan / Goal Group Recoveries, Inc., New York at +1 212 248 9130 for further questions.