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Swiss Business Federation Comments on Executive Pay Vote

by Ulrika Lomas, Tax-News.com, Brussels

05 March 2013


Swiss business federation Economiesuisse has lamented the outcome of the March 3 ballot on Thomas Minder’s "abusive remuneration" initiative, warning that the "yes" vote is a "negative signal" for Switzerland as an economic location.

As predicted, an overwhelming 67.9% of voters in Switzerland backed the initiative. Submitted to parliament back in 2008 by Swiss entrepreneur and parliamentarian Thomas Minder, the package of proposals seeks to strengthen shareholders’ rights in Swiss companies listed on either the Swiss or foreign stock exchanges, allowing them to vote on executives’ pay. The proposals also ban golden parachutes or handshakes. Failure to respect the rules will result in hefty sanctions and fines being imposed, including prison sentences of up to three years.

Opposed to the Minder initiative, considering that such modifications to the law could have serious implications for the Swiss economy, the Government put forward a counter proposal, offering alternative solutions aimed at limiting excessive pay. However, following the vote, Swiss Justice Minister Simonetta Sommaruga also acknowledged the will of the Swiss people and their level of anger, underscoring the Government’s commitment to presenting draft legislation within the required timeframe of a year.

While respecting the will of the people, Economiesuisse argued that the Government’s counter proposal offered an alternative, more attractive solution to the issue of limiting abusive and unacceptable levels of pay in the Confederation. However, according to Economiesuisse, the longstanding emotive and complex debate on the exorbitant pay of a few isolated executives prevented an objective discussion on the actual content of the initiative from the outset. The fact that the people were not able to vote on the counter proposal made the election campaign significantly harder, it claimed.

Economiesuisse explained that the challenge is now to ensure practical implementation of the initiative, emphasizing that it pledges to work constructively alongside the Government on drafting an implementation bill, representing the interests of businesses in Switzerland. The federation nevertheless ruled out the idea of incorporating the additional proposals put forward ahead of the vote by the Swiss Social Democrats, including plans for a controversial bonus tax, maintaining that these extraneous measures have no place as they have not been directly and democratically legitimized.

TAGS: tax | business | interest | law | legislation | stock exchanges | Switzerland

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