Swiss drug maker Novartis will cancel a CHF72m ($78m) package intended to prevent chairman Dr Daniel Vasella from sharing his expert knowledge when he resigns on Friday.

The board of directors and Vasella announced the decision on Tuesday in the wake of criticism surrounding the size of the payout.

Novartis said the non-compete required that Vasella "refrain from making his knowledge and know-how available to competitors who may take advantage of his experience with the company."

But the pay-off has caused outrage in Switzerland, where a referendum is scheduled on 3 March to discuss whether to give shareholders more power over executive pay.

Vasella said in a statement; "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."

The board of directors said it continues to believe in the value of a non-compete but added, "the decision to cancel the agreement and all related compensation addresses the concerns of shareholders and other stakeholders."

Vasella was chief executive of Novartis from 1996 until 2010, and has been chairman since 1999. He is due to step down from his role at the Novartis Annual General Meeting on 22 February.

Image: Daniel Vasella at the World Economic Forum in January. Photo: Courtesy of World Economic Forum.