Voters in Switzerland have backed proposals for imposing some of the world’s toughest limits on executive pay, including giving shareholders the right to veto pay packages and the threat of up to three years’ jail for company board members who do not comply.
The proposals received 67.9% support for curbs on top pay on Swiss firms, with all 26 Swiss federal states or cantons approving the measures. Voter turnout was, however, only 46% with a total 1.6m voting in favour and 762,000 rejecting the proposals.
Swiss business groups opposed the curbs, arguing that it would damage the competitiveness of the country’s firms, but analysts said that Swiss citizens are concerned at a growing economic divide. This was evidenced last month when pharmaceutical group
abandoned plans for a large payoff to departing chairman Daniel Vasella in the face of fierce opposition from shareholders.
The so-called ‘fat cat initiative’, devised by former businessman turned politician, Thomas Minder will now be submitted to the country’s Federal Council before being written into the Swiss constitution. It will apply to all Swiss companies listed on the Swiss stock exchange. In addition to giving shareholders a veto on salaries, golden handshakes for new and departing executives will also be outlawed.
Justice minister Simonetta Sommaruga admitted that enforcing the new regulations would prove challenging, but was confident that Switzerland would still be an attractive location for businesses. “I am sure the economy can cope with this,” she added. Forty-nine of Switzerland’s top companies already voluntarily give investors an advisory vote on executive pay.
The Swiss vote came only days after the European Union (EU) approved measures to cap
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