Swiss vote on whether to rein in executive pay

3rd March 2013, Comments 0 comments

The Swiss headed to the polls Sunday morning for a referendum on whether to rein in executive pay, and force business leaders to give up their departure compensation known as golden parachutes.

In Zurich, polling stations opened at 6:00 am (0500 GMT), in Bern at 8:00 am, while voters in Geneva had to wait until 10:00 am to cast their ballots.

Most Swiss, who are called to the polls for referenda several times a year as part of the country's direct democratic system, meanwhile vote in advance by mail.

Known as the Minder Initiative, after its sponsor businessman Thomas Minder, the resolution results from a petition that mustered the support of 100,000 voters, enough to force a vote.

While Switzerland has avoided the level of economic crisis seen in the European Union, which surrounds the Alpine nation, public anger has risen over what is deemed abusive levels of pay and bonuses for top bosses, and polls show the initiative will likely pass the popular vote.

Among those in the spotlight have been Daniel Vasella, former head of pharmaceuticals giant Novartis, who made 15 million Swiss francs (12 million euros, $16 million) in 2011.

Adding fuel to the fire was Vasella's planned 72 million Swiss franc golden parachute, to be paid out over six years, provided he did not go to work for the competition after stepping down this February.

The deal sparked uproar when details were leaked recently, and despite Novartis's subsequent announcement that Vasella, at the helm since 1996, would forgo the sum, he has remained the unwilling poster boy for the referendum campaigners.

The text being voted on Sunday calls for "setting limits for stock exchange-listed companies so that they cannot give their executives excessive compensation."

It would limit the mandate of board members to one year, and would ban certain kinds of compensation, including the so-called golden handshakes or golden parachutes given to executives when they leave a company.

In addition, if the bill passes into law, compensation packages to board members and the company leadership will need to be approved by the general assembly of shareholders.

Anyone within the listed companies affected who does not follow the rules could face up to three years behind bars and fines amounting to up to six years of their salary, according to the text.

The Swiss government and the upper house of parliament have come out against the initiative, cautioning that some large companies might decide to move their headquarters out of the country.

© 2013 AFP

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