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Switzerland Passes Tough Executive Pay Rules.

Posted in Business Transactions, Corporate Governance, International Banking, international business, International Investments, international law

With all the talk about executive pay here at home, it’s interesting to note that Switzerland just passed a set of tough executive pay rules.

The new rules allow shareholders at Swiss-listed companies a binding vote each year on the total compensation of boards of directors and senior management, as well as a total ban on “golden parachutes” and executives being paid compensation in advance.  Those who violate the rules face criminal penalties.

Critics of the new plan have claimed that it will leave Swiss-listed companies unable to compete for top talent with the rest of the world, or even non-Swiss listed companies within Switzerland.

However, those behind the plan clearly see it as the beginning of a global trend.

The UK is also introducing reforms to give shareholders a binding vote on pay in October, as well as measures to make remuneration packages more transparent.

It’s easy to see why. Excessive executive pay has been a lightning rod for public anger across the world since the financial crisis.

The EU is already capping bankers’ bonuses and now the Swiss people has spoken very clearly as well

 What do you think?