2013 Swiss executive pay initiative

The 2013 Swiss executive pay initiative of 2013 was a successful federal popular initiative in Switzerland to control executive pay of companies listed on the stock market, and to increase shareholders' say in corporate governance. It was one of three questions put to the electorate in the March 2013 referendums. The vote took place on the 3 March 2013, and passed with a majority of 67.9%, with a 46% turnout. The initiative mandates the Federal Government to implement the provisions within one year, pending implementation of the final law.

The initiative partly reflected developments in the United States Dodd-Frank Wall Street Reform Act 2010 §957, that banned brokers from voting on their clients' money, and the Stewardship Code 2010 in the United Kingdom, which placed a duty on financial intermediaries to disclose their voting policies and make use of voting power. It also reflected a long running debate in Germany, which had not yet been reformed, about the position of banks.See the Geßler Commission (1979) In German, the title of the referendum is the , literally "Against Rip-off" and in French, the , literally "against abusive remuneration".

Background Due to corporate scandals before the 2008 financial crisis, Thomas Minder launched a campaign "against rip-off salaries" (). By 26 February 2008, he had gathered 118,583 signatures to launch a referendum under the Swiss constitutional rules. Minder's concern focused on the excesses of executive pay the ability of banks, who in the Swiss (and German) system of shareholding hold all share certificates, to vote by proxy using shares owned by other people, and the inability of pension beneficiaries and policyholders to determine their deposits were being used for voting.

Supporters of the initiative spent 200,000 Swiss franc, whilst opponents spent 8 million Swiss francs in their campaign to block the reform. The public campaign drew particular attention to the large payouts for executives of Novartis and major Swiss banks. On 3 March, the referendum results showed that 67.9 per cent of voters supported the reforms.

A German initiative followed a month later, and if passed would represent a significant broadening of pay controls in Europe."Germany Weighs Pay Curbs; Legislation Would Give Shareholders More Say Over Executive Compensation" March 12, 2013 WSJ

Text of the initiative The translation of the text is as follows.nb Official translations are only available in German, French and Italian.

Results

+ Against rip-off salaries initiative – Official results Canton Yes (%) No (%) Voter turnout (%)Argovia 66.8% 33.2% 44.4%Appenzell Ausserrhoden 66.3% 33.7% 51.8%Appenzell Innerrhoden 61.0% 39.0% 41.9%Basel-Landschaft 67.5% 32.5% 44.5%Basel-Stadt 67.3% 32.7% 49.4%Bern 70.3% 29.7% 42.8%Fribourg 70.3% 29.7% 44.5%Geneva 67.7% 32.3% 46.5%Glarus 69.6% 30.4% 36.1%Grisons 65.5% 34.5% 56.2%Jura 77.1% 22.9% 40.6%Lucerne 66.3% 33.7% 46.2%Neuchâtel 71.9% 28.1% 41.7%Nidwalden 57.7% 42.3% 49.0%Obwalden 56.1% 43.9% 51.6%Schaffhausen 75.9% 24.1% 64.9%Schwyz 60.8% 39.2% 49.2%Solothurn 67.9% 32.1% 48.6%St. Gallen 66.4% 33.6% 44.0%Ticino 70.7% 29.3% 41.5%Thurgau 70.5% 29.5% 43.1%Uri 64.3% 35.7% 41.4%Vaud 66.5% 33.5% 41.4%Valais 63.7% 36.3% 67.8%Zug 58.2% 41.8% 51.9%Zürich 70.2% 29.8% 47.0%Switzerland 67.9% 32.1% 46.0%

Significance The Swiss referendum had an immediate impact on other countries seeking its own reforms."Excess Under Siege: Europe Gains Momentum against Corporate Greed (4 March 2013) Spiegel Online It led to calls by the German Social Democratic Party to introduce similar reforms in Germany" Schweizer Volksabstimmung: SPD fordert Anti-Gier-Gesetz für Deutschland" (4 March 2013) Spiegel Online and it is quoted in the Bill proposed in Italy on cap-salaries for public employees.

Daniel Alpert of The Century Foundation saw the measures as unnecessary.

2013 Swiss executive pay initiative

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