The Swiss Parliament has approved an alternative to a people’s initiative aimed at restricting excessive salaries, ending a four-year struggle for a solution.
The initiative by entrepreneur and senator Thomas Minder against “fat cat” salaries dates back to 2008 and parliament has since been grappling to ensure a counterproposal is put forward when it goes to a nationwide ballot.
The alternative takes a softer approach to Minder’s initiative. He called for a complete end to golden parachutes and pay-offs, while parliament’s counterproposal leaves room for exceptions. These will have to be in the interests of the company and be accepted by two-thirds of shareholders.
The counterproposal also gives shareholders more room to manoeuvre. Minder’s initiative calls for shareholders of companies listed on the stock exchange to vote each year on management salaries. The counterproposal also follows this line, but allows shareholders to opt for a mandatory or consultative vote on executive salaries.
When it comes to electing the board of directors, the initiative wants annual elections while the alternative would give companies a choice of voting every two or three years, and lets shareholders decide if they want to elect the president themselves.
The two proposals are very similar when it comes to bonuses, credit and loans for board members and management.
The counterproposal and the initiative will both go to a nationwide vote at the same time. The House of Representatives recommended the public accept the counterproposal and reject the initiative. The Senate is likely to do the same in June.