Swiss companies de-list to sidestep pay laws
Several Swiss companies are choosing to de-list from the Berne eXchange (BX) rather than face the cost of adhering to tough shareholder laws implemented last year.
The new law, officially introduced this January, means companies trading on the BX require binding shareholder votes on executive pay. It also forces companies to be more transparent over retirement packages and loans, and to elect board members individually on an annual basis.
Though the law won’t be enforced until January 1, 2016, many companies have already determined that complying with it forces up administrative, legal and accounting costs. As a result, some have chosen to forgo their public listing so they can afford to survive. National railroad operator Berner Oberland-Bahnen’s de-listing, for one, brings an end to more than a century’s trading in Switzerland.
‘We’ve been listed on the stock exchange for longer than I can remember,’ says Christoph Seiler, Berner Oberland-Bahnen's chief executive, in an interview with the Wall Street Journal. ‘But the costs and effort of implementing the new rules are too much for a small company like ours.’
The railway firm joins four other companies that have given up their listing on the BX in the past year, including fellow train operators Gondelbahn Grindelwald-Männlichen and BLS.
Some Swiss companies have already phased elements of the law into their own corporate policies, with most shouldering the cost of implementing an expensive electronic shareholder voting system as suggested by the new law.
Critics, meanwhile, have attacked not only the costs involved but also the potential for promoting short-termism, should the reforms prompt the faster turnover of corporate boards.
Despite the laws being broadly supported by Swiss voters, the country’s constituents rejected proposals to further limit executive pay in November 2013.