If the polls are right, Switzerland is set on Sunday to enshrine what are touted as the toughest controls on pay for executives in the world.
A popular initiative against “abusive” compensation for the top brass of Swiss companies has caught the imagination of the country’s population — and international attention.
On Sunday, the results will be made public on a national vote on the proposal launched by Thomas Minder, a Schaffhausen businessman and independent member of the Swiss senate.
The initiative would require Swiss companies to give shareholders an annual binding vote on the total compensation of boards of directors and senior management.
Compensation paid in advance to executives would be banned, along with golden parachutes to departing bosses.
“This is not a Swiss issue,” Minder told The Local in an earlier interview.
“All over the world there’s the same discussion.”
Minder, who heads a small company called Trybol that sells “natural cosmetics,” maintains the current pay system is rotten because it rewards a select group of individuals regardless of the performance of the companies they lead.
Recent polls have shown a clear majority of citizens support Minder’s initiative over a counter-proposal from the federal government.
The government advocates shareholder votes over executive pay, but they would be non-binding.
The cabinet, and Economiesuisse a lobby group for big business, believes Minder’s bid to cut “fat cat” pay risks harming Switzerland’s appeal internationally as a place to do business.
But a national outcry over a planned payment of 72 million francs to Daniel Vasella, recently departed chairman of drug giant Novartis, undermined the government’s position.
Faced with criticism from politicians and businessmen alike, Vasella ultimately decided to decline the “non-compete” payment meant to ensure that he would not work for a rival company.
But the episode served as a public reminder of the gap between what top executives and average citizens are earning.
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