Swiss referendum backs executive pay curbs

Daniel Vasella, chairman of Swiss drugmaker Novartis There was outrage in Switzerland over a $78m pay off, later scrapped, to the outgoing Novartis chairman

Swiss voters have overwhelmingly backed proposals to impose some of the world's strictest controls on executive pay, final referendum results show.

Nearly 68% of the voters supported plans to give shareholders a veto on compensation and ban big payouts for new and departing managers.

Business groups argued the proposals would damage Swiss competitiveness.

But analysts say ordinary Swiss are concerned about a growing economic divide in the country.

The vote came just days after the EU approved measures to cap bankers' bonuses.

'Fat cat initiative'

The final results showed that all 26 Swiss cantons backed the proposals.

In all, 1.6 million voters said "Yes" against 762,000, who rejected the idea.

The BBC's Imogen Foulkes, in Berne, says multibillion dollar losses by Swiss banking giant UBS, and thousands of redundancies at pharmaceutical company Novartis, have caused anger in Switzerland - because high salaries and bonuses for managers continued unchanged.

The new measures will give Switzerland some of the world's strictest corporate rules, our correspondent adds.

Start Quote

We had the support of the people of Switzerland because you know not everybody in Switzerland is rich”

End Quote Brigitte Moser Harder Referendum organiser

Shareholders will have a veto over salaries, golden handshakes will be forbidden, and managers of companies who flout the rules could face prison.

The "fat cat initiative", as it has been called, will be written into the Swiss constitution and apply to all Swiss companies listed on Switzerland's stock exchange.

Support for the plans - brain child of Swiss businessman turned politician Thomas Minder - has been fuelled by a series of perceived disasters for major Swiss companies, coupled with salaries and bonuses staying high.

Our correspondent says the main example is banking giant UBS, which wrote off billions in the wake of the 2007 sub-prime mortgage crisis, and then had to be bailed out by the Swiss government.

A further incident came in February when it was announced that the outgoing chairman Novartis', Daniel Vasella, would be receiving a 72m Swiss francs (£51m; $78m) "non-compete" pay off over six years, designed to stop him working for other related industries.

The payment was later scrapped, but it provoked anger and amazement in Switzerland, because his salary had been regarded as too high and the firm had been cutting jobs, our correspondent adds.

One of the organisers of the referendum, Brigitte Moser Harder, told the BBC she thought the Swiss people agreed with the proposals because the gap between rich and poor had become wider.

"From the beginning, 2006, we had the support of the people of Switzerland because you know not everybody in Switzerland is rich.

"It's also a social problem because the high wages got higher and the small ones sometimes just got lower. I think people have the support of the Swiss people because of that."

Meanwhile, under an EU deal agreed last week by the bloc's 27 nations, bonuses will be capped at a year's salary, but can rise to two year's pay if there is explicit approval from shareholders.

The UK argued the EU bonus rules would drive away talent and restrict growth in the financial sector.


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  • rate this

    Comment number 83.

    If an employee channelled funds into his own account it would be fraud or theft. However, if directors who are minor shareholders voted to give themselves millions it's OK.
    If a fund manager banks the kitty on losing shares then he's either a crook and gets punished or he gets a big bonus.
    It's difficult to identify the difference between crooks and directors or bonuses and theft. Who knows?

  • rate this

    Comment number 82.

    Sorry Dave & Co.

    Your weak excuses are not valid.

    Please try harder to be human, like the rest of us.

  • rate this

    Comment number 81.

    Excellent, we should do the same. The argument that it will damage competitiveness is rot.
    It's not as if we are highly competitive already.
    Earnings of over £500k per year should be taxed at 99%.
    Good people are not only motivated by money.
    Let's start with the BBC, the supermarkets, banks and Marks and Spencer.
    No one should earn more than 20 times the minimum wage.

  • rate this

    Comment number 80.

    So, all these talented people will flee if we put sensible curbs on their runaway pay. Where would they go and how much pay is "enough"?

    This is naked blackmail and we should call their bluff. Banks have politicians in their pockets because they provide them with lucrative employment when they're all washed-up.

    They're feathering a future nest - and sending the rest of us to hell.

  • rate this

    Comment number 79.

    Is anyone else starting to get the feeling that the World is finally starting to wake up to these greedy pigs?

  • rate this

    Comment number 78.

    In the light of the UK governments comments and support for no cap on bonuses or caps on executives pay, can someone tell me what the Lib Dems are for? Oh I forgot, rubber stamp policies for the rich and sell them to the poor.

  • rate this

    Comment number 77.

    If talent's driven away by the lack of being able to give yourself ridiculously extortionate pay that isn't put under threat by poor results, then clearly that 'talent' isn't welcome to the vast majority in this country. The fact that this 'talent' has already repeatedly failed us is further evidence of that. Someone with a bit of integrity and a long-term plan will fill the gap pretty quickly.

  • Comment number 76.

    All this user's posts have been removed.Why?

  • rate this

    Comment number 75.

    @53 - when did Switzerland join the EU?

  • rate this

    Comment number 74.

    I can't imagine this kind of socialist tampering with executive pay will be replicated in the US or in Asian countries.

    But it's interesting that a Swiss referendum was needed [hint for Dave Cameron].

  • rate this

    Comment number 73.

    @ 8. shanalang

    This is now making the UK appear really shabby and corrupt.

    NO the UK has been shabby and corrupt for a very long time like most 1st world countries. Just some see the writing on the wall

  • rate this

    Comment number 72.

    I guess British bankers won't be skipping the country to Switzerland! Kind of de-fangs that argument.

    The only bankers who'll skip the country now are those who are unafraid of transferring their children to an alien culture half-way through school. Not sure those are the people I'd pander to and set the tone of the country for. Not sure there are too many of them anyway...

    Call their bluff!

  • rate this

    Comment number 71.

    There are some very selfish people on here - either with snouts in the trough themselves or just 'agent provocateurs'?
    Those greedy bonus-getters take their money & invest abroad. They do not benefit our economy or provide more decent jobs. Some of these banks are owned by the taxpayers & I do NOT wish to pay for their bonuses, but haven't been asked - a referendum would ask those questions.

  • rate this

    Comment number 70.

    Stamp out bonuses. A decent days pay for a decent days work.
    The bonus culture is an incentive to take risk and break the law.

  • rate this

    Comment number 69.

    The revolution is coming... Now all we need Cameron to wake up and smell the daisies...

  • rate this

    Comment number 68.

    The group most likely to suffer are not the poor Swiss but the unlucky "top" foreigners that decided to move to CH, those who make up nearly 50% of top exec positions.

    As foreigners cannot vote (25% of all tax payers), the majority of those in in the firing line were unable to vote.

    No, I don't like Fat Cats either but please, this is not a Democracy!

  • rate this

    Comment number 67.

    Curb monopolisation -- that's what causes ridiculous salaries. Force competition. That will ensure You And I get a chance at the kitty too. Change attitudes.. Ie: Why does a US company have a monopoly over UK searching and net advertising? No, I don't like Cameron or anything, but i would never support this Swiss logic. It's as full of holes as their cheese.

  • rate this

    Comment number 66.

    The Swiss can do this because they live in a democracy that works.

    The main reason Swiss democracy works is because people take it seriously and vote responsibly.

    All of the UK's problems; economy, welfare, education, immigration etc. are because the British people not voting responsibly. An unaffordable election bribe is all it takes.

    Proof: Labour ahead in the 2015 polls. Says it all.

  • rate this

    Comment number 65.

    IF U believe that Governments shud govern & that Gov'ts shud promote sound money (in add'n 2 external defence & internal law & order & tranquility & a resilient economy) THEN the swiss have rolled out the correct and constructive policy on executive pay, haven't they?
    REASON: the gap between rich and poor will be bridgeable by merit & effort, thus leading to a cohesive society. [Contra diversity]

  • rate this

    Comment number 64.

    ahh i see it now an act to empower the shareholders well thats ok . but seeing how the major shareholders are pension companys and their managers went to the same schools and go to the same clubs as the bank executives and politicians it will not work then .


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