Famously Corporate-Friendly Switzerland Set to Get Tough on CEO Pay
Mir, Meritxell, The Christian Science Monitor
Switzerland has a reputation as one of the most business- friendly countries in the world. But huge salaries and bonuses for top managers of Switzerlands listed companies could soon be a thing of the past if voters back a national initiative on Sunday.
At least 64 percent of the Swiss population among the richest and highest-paid in the world are expected to vote in favor of giving shareholders a binding vote in the salaries of executive and advisory boards and the board of directors, according to a poll conducted by Gfs Bern research and polling institute in mid- February.
They should be paid according to their performance, says Brigitta Moser-Harder, member of the Committee of the Popular Initiative against Abusive Executive Pay, which initiated the referendum. These managers want the money and they dont care if the company is doing well or not.
The Minder Initiative, named for the businessman who proposed it, Thomas Minder, includes 24 constitutional provisions, including a ban on signing bonuses, bonuses for managers whose firms are taken over, and additional contracts for consulting work for other companies within the same corporate group.
Switzerland's system of direct democracy means its citizens have a binding say on an issue that took on new life across Europe and in the US with the beginning of the financial crisis in 2008.
Countries such as Germany and the United States have already given investors the right to non-binding vote on pay and bonuses, and the United Kingdom plans to implement binding measures later this year. The European Union approved a provisional agreement Thursday on new financial rules that also includes caps for bonuses for bankers they are not to exceed one years salary but with shareholder approval, can rise to two years salary.
Mr. Minder first proposed the Swiss initiative seven years ago, and by 2008 he had collected more than the 118,000 signatures required to put the initiative to a public vote. Three years later, boosted by the financial crisis and the bailout of Switzerlands biggest bank, UBS, costing Swiss taxpayers $59.2 billion, he won a seat in the Swiss parliament as an independent candidate.
A bane to business?
Swiss political parties in the center and right, as well as business, trade, and industry associations, oppose the initiative because they say it would strike a severe blow to the Swiss economy. …