Swiss voters have approved measures to curb executives’ pay and outlawed golden parachutes that can result on directors pocketing multimillion-pound payoffs.
Exit polls suggested almost 68% of those who turned out for Sunday’s referendum, and all of Switzerland’s 26 cantons, were in favour of the measures, which also include giving shareholders a binding vote on executive pay, banning golden hellos and banning bonuses that encourage buying or selling firms. Boards of directors that fail to comply face jail terms.
In Zurich, Switzerland’s financial capital where polling stations remained open until 6.30pm local time – as opposed to noon in other cantons – analysts were suggesting that an overwhelming majority of 71% of voters approved the Minder initiative.
“The people have decided to send a strong signal to boards, the federal council [Swiss government] and the parliament,” Thomas Minder, the businessman and Swiss senator behind the measure, told the state broadcaster, RTS. Minder said he was not surprised by the projected results.
The draft law, which covers Swiss companies listed on Swiss or foreign stock exchanges, is likely to put pressure on David Cameron, who has signalled his intention to object to proposals put forward by Brussels for a cap on bankers’ bonuses.
The Eurogroup of finance ministers meets on Monday to debate proposals for the cap, announced last Wednesday, which would mean that bankers face an automatic limit on bonus payouts of one year’s salary, or twice their salary if a majority of shareholders agree.
George Osborne or the Treasury minister Greg Clark will represent Britain to relay what No 10 described as real concerns about the proposal.
The Swiss law would limit the mandate of board members to one year, and would ban certain kinds of compensation, including the golden handshakes or golden parachutes given to some executives when they join or leave a company.
It also outlaws bonuses paid for takeovers or for the sell-off of part of a business.