More than two thirds vote against limiting pay to 12 times that of lowest earner
Swiss voters rejected a proposal to limit executive pay to a maximum of 12 times the salary received by a company’s lowest-paid employee.
Sixty-five percent of people who voted in a nationwide referendum cast ballots against the measure, which opponents said would likely lead to an exodus of effective business leaders and possibly prompt some companies to seek headquarters elsewhere. About 53 percent of registered Swiss voters turned out for the referendum, according to official figures released by Swiss national broadcaster Radio Télévision Suisse.
Switzerland, which is home to major multinationals including drug maker Novartis, UBS, Roche Holding, ABB, Nestlé and others, has been host to a highly watched debate over executive pay this year. In a referendum in March, almost 70 percent of voters backed a proposal to ban one-time bonuses known as ‘golden hellos’ and ‘golden goodbyes’ and gave shareholders the right to binding votes on executive compensation.
The controversy over executive pay intensified earlier this year on the news UBS awarded $2.6 mn in bonuses to its executives even though it suffered a loss of the same amount. The $17 mn annual salary of Novartis CEO Joseph Jimenez, which was 266 times that of the company’s lowest-paid worker, also became a focal point for ‘yes’ campaigners in the referendum.
The youth wing of Switzerland’s Social Democrats, which initiated the proposal by gathering the necessary 100,000 signatures, says the campaign was a victory overall, even if the referendum was lost. ‘We have an achievement nonetheless,’ David Roth, president of the Social Democrats youth wing, told news agency Reuters after the vote. ‘A year ago, opponents were defending high salaries. Today no one is doing that. No one in Swiss politics would dare say million-dollar salaries are justified.’
The Swiss business community greeted the results of the weekend referendum with relief.
‘I am happy with the result,’ Hans-Ulrich Bigler, head of the small and medium business lobby Schweizer Gewerbeverband, told the Financial Times. ‘The voters recognized that Switzerland’s economic success is based on the social partnership between employers and employees.’
