Swiss managers are the highest-paid in Europe, and Swiss rules on transparency and disclosure of executive pay are less stringent than in other European countries. Many blue-chip companies disclose more information than required by Swiss law, which offers companies wide latitude it disclosure.
Switzerland has so far not experienced the sort of public rows over sky-high executive pay, now common elsewhere. However the winds may be changing.
Thomas Minder, who attends general meetings of Swiss multinationals to gather support for his cause, is seeking to open up Swiss corporate culture to shareholder democracy. Minder is the CEO of Trybol, a Swiss cosmetics company. Over the past several months he has been collecting signatures to call a national vote to change Swiss law: the amendment would impose greater transparency and accountability in the field of executive pay. Minder’s most controversial proposal calls for a binding shareholders vote on management pay.
If the referendum passes, shareholders in Switzerland would have more power than anywhere else in Europe over executive pay. In the UK, there are regulations on the books since that stipulate votes on company remuneration, but the votes are nonbinding. France and Sweden also have laws which address the issue, but they are as well nonbinding and therefore of little practical consequence. Mr. Binder’s idea is entirely different. “We want shareholders to vote on specific sums,” he says.
Minder’s favorite target is Swiss pharma giant Novartis’ boss, Daniel Vasella, who was the highest-paid boss in Switzerland and the highest paid of any listed company in Europe. Minder attended the annual shareholders’ meeting of Novartis in March with intent to stir up trouble, taking the floor and pointing out that with an annual pay package of SFr44m, Mr. Vasella is paid 30 times more today than when he was appointed in 1996.
Bosses of other big European firms are paid less. Mr Minder wants Mr Vasella’s pay cut in half and his golden parachute, worth five years’ pay, to be nixed. Novartis now says that Mr. Vasella’s eventual successor will not be offered a golden parachute.
In order to succeed in bringing the issue to a national vote, Mr. Minder must first collect 100,000 signatures so that his proposals can be put to both houses of Switzerland’s parliament.
