Day after the European Union's announcement of limiting the amount of bankers' bonuses, one of the strictest regulations of executive salaries was approved also in Switzerland. 68% of the voters in a national referendum allowed shareholders a veto on the issue of executive compensation. At the same time, golden parachutes and other giant bonuses paid to coming and departing managers was prohibited. The result of the referendum, backed by the majority is all the Switzerland's cantons, will now become a part of the Constitution and apply to all companies listed on the Swiss stock exchange.
The proposal to limit executive salaries was initiated by Thomas Minder, entrepreneur and current deputy, already in 2006. The Swiss indignation against high managerial rewards during the economic crisis was then sparked by the huge financial losses of the UBS banking company or the large-scale redundancies in the pharmaceutical company Novartis which occurred despite the high rewards of these companies' managers. Now they will be at risk of financial penalties or up to three years in prison for such a behaviour. Management will have to submit executive salaries to shareholders for approval.
Opponents of the proposal, especially right-wing parties and trade unions, pointed out that, if approved, it would damage the country's competitiveness. However, the result of the referendum showed that the Swiss perceive especially the growing economic disparities in the country.
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