Swiss Voters Get Their Say on Executive Pay

Swiss chief executive officers, including Roche Holding’s Severin Schwan and Nestlé’s Paul Bulcke, earn some of the world’s highest salaries. That may soon change. With more than 100,000 Swiss citizens having signed a petition to limit what they call “fat cat” pay, voters will decide in a March 3 referendum whether top executives should have their compensation set by shareholders rather than the members of clubby corporate boards. While a recent poll shows a majority may vote yes, the nation’s business lobby warns the move will drive out tax-paying companies. “If you have this kind of limitation on executive pay, why should an American company put their European headquarters into Switzerland?” asks Philip Mosimann, CEO of Bucher Industries, a Swiss maker of street sweepers. “They would leave. I’m certain of that.”

Arguments that unfettered pay is needed to draw executives to Switzerland took a big hit on Feb. 15, when it became public that the board of Swiss drugmaker Novartis had agreed to a 72 million Swiss franc ($78 million) payment to outgoing Chairman Daniel Vasella to keep him from working for a rival after he retires on Feb. 22. Such payouts for departing managers would be criminalized if the referendum passes. Vasella received 13.1 million francs in compensation last year. Franz Humer, chairman of crosstown rival Roche, received 8.67 million francs in compensation last year.