Belfast Telegraph

Friday 22 August 2014

Swiss vote on 'Rip-off Initiative'

The proposal has divided Swiss business groups, political parties and unions

Foreign executives who moved their company headquarters to Switzerland to get better tax deals for their firms may find themselves paying the price for it this weekend.

A plan to crack down on excessive corporate pay packages is predicted to pass at the ballot box on Sunday.

If the "Rip-off Initiative" succeeds, shareholders will be given the right to hold a binding vote on a company's compensation of executives and directors. This includes both base salary and bonuses.

It would also ban "golden hellos" and "golden goodbyes" - one-time bonuses that senior managers often receive when joining or leaving a company which can run into millions of pounds.

Finally, the proposal pushes greater corporate transparency, for example by requiring that all loans to executives be declared to shareholders.

Breaching the rules could lead to a fine of up to six annual salaries and up to three years in prison.

The measure targets all Swiss-based companies - homegrown and offshore alike - as long as their shares are publicly traded.

Some other European countries such as the Netherlands and Denmark already have similar legislation allowing shareholders at least a binding vote on executive compensation. In Britain, however, such "say-on-pay" votes are non-binding.

The proposal has divided Swiss business groups, political parties and unions. But public opinion in Switzerland - traditionally a haven for light-touch regulation and pro-business sentiment - has been overwhelmingly in favour of the Rip-off Initiative.

A survey conducted mid-February by the respected polling group gfs.bern found 64% of voters in favour of the proposal, 27% against, 9% undecided, with anger at perceived corporate greed the driving force for voters backing the initiative.

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