SWITZERLAND yesterday voted for a tough new stance on executive pay, including a right for shareholders to veto rewards and the threat of jail time for boards that do not comply.
A large majority of Swiss citizens supported plans to introduce a mandatory say on pay for investors and a ban on financial sweeteners for new and departing executives.
Voters gave 67.9 per cent support for the right to curb top pay at Swiss firms, on a turnout of 46 per cent.
All 26 of the Swiss cantons approved the measure, which comes weeks after Novartis investors forced outgoing chairman Daniel Vasella to give up his SFr72m (£50.8m) package.
Thomas Minder, the herbal toothpaste boss-turned-politician behind the campaign, said the result was “a clear sign of the distance between the people and the political and business establishment”.
Forty-nine of the top 100 Swiss companies already give investors an advisory vote on executive pay, but the proposals go much further, with penalties including up to three years in jail for directors that breach rules.
Justice minister Simonetta Sommaruga said that enforcing the crackdown would be tough, but stressed that Switzerland will remain an attractive location for businesses. “I am sure the economy can cope with this,” she said.
Economiesuisse, a business lobbying group that fought against the change, warned the proposals will scare away international talent.
The rules will now be put to the country’s Federal Council to be passed into law.
In the UK, business secretary Vince Cable is planning to introduce rules forcing firms to give shareholders a binding vote on executive pay every three years. The Swiss vote is very different to the EU’s new bonus caps on bankers, even though both are being compared.