Novartis AG has cut former Chairman Daniel Vasella’s payout to less than a tenth of the original $78 million, a sum that had helped galvanize support for a Swiss referendum on limiting executive pay.

Vasella, 59, will receive 4.9 million Swiss francs ($5.2 million) for eight months of work this year on the transition to his successor, Joerg Reinhardt, the Basel, Switzerland-based drugmaker said in a statement today. After that, he’ll get $25,000 a day for consulting work, with at least $250,000 guaranteed annually for the next three years, which would bring the total to at least $5.95 million.

In other news, Novartis (NYSE: NVS) on Wednesday raised its profit and sales forecasts as generic competition for its Diovan blood-pressure medicine failed to materialize in the U.S.

The agreement may not appease investors and corporate governance experts who described Vasella at the company’s annual meeting in February as an overpaid, imperial chairman. In almost two decades building Novartis into Europe’s biggest drug company by sales, Vasella also was criticized by groups such as Ethos, a foundation that advises institutional investors on governance, for holding both the chairman and chief executive officer jobs.

“We are astonished; we think it’s exaggerated,” Dominique Biedermann, the chief executive officer of Geneva-based Ethos, said of the consulting contract. “A manager who leaves is gone. We don’t understand why Mr. Vasella needs to stay on as a consultant for another three years.”

The payment for his work from Feb. 22, when he stepped down as chairman, through Oct. 31 consists of 2.7 million francs in cash and 31,724 unrestricted shares, which have a current value of about 2.2 million francs, Novartis said.

[Novartis operates a huge vaccine production plant as well as a research operations in Holly Springs.]

Coaching, Speeches

After Oct. 31, he will be available to provide consulting such as “the coaching of high-potential associates of Novartis and speeches at key Novartis events,” according to the statement.

Eric Althoff, a spokesman for Novartis, didn’t immediately respond to a request for comment on Biedermann’s remarks. Novartis hasn’t requested any consulting above the minimum 10 days annually, Althoff said in an earlier telephone interview. Vasella will be able to use the company’s jet and helicopter during his Novartis service, he said.

“This may be controversial to some investors,” Tim Race, an analyst at Deutsche Bank AG, said of the contract in a note to clients.

While Vasella holds the title of honorary chairman, he won’t attend board meetings and will receive no compensation for the role other than administrative support and security, the company said.

Stock Drop

Novartis fell 1.5 percent Wednesday in Zurich. The company also reported today that second-quarter profit fell 2 percent. Novartis raised its sales and earnings forecasts for the year as generic competition for the Diovan blood-pressure medicine failed to materialize in the U.S.

Vasella was set to receive as much as 12 million francs a year over six years in a non-competition agreement, until details leaked in February. The board and Vasella scrapped the plan after a public outcry over the size of the pay. In March, Swiss voters approved some of the world’s toughest limits on executives’ pay in a referendum.

The agreement announced today wouldn’t be subject to the new limits, which don’t cover consulting contracts, Biedermann said.

Vasella oversaw the 1996 merger of Sandoz AG and Ciba-Geigy AG that created Novartis, in what was then the world’s biggest merger. He ran the combined company until 2010, when he ceded the CEO role while remaining chairman.