Swiss shareholders demand say on pay

Nov 07, 2008

Inadequate proposals put forward by Swiss government
 
Shareholder activist body Ethos is pressing the Swiss government for more investor rights on executive remuneration. The request comes in response to an address made by Swiss Federal Council member Eveline Widmer-Schlumpf, who recently told journalists the government was considering making a proposal to allow shareholders to vote on non-executive director fees.

Ethos sees the proposal as commendable and an important breakthrough if it were to happen, but deems it insufficient, urging that shareholders also be given a say on executive management remuneration. ‘The government’s announcement to the press was an attempt to show it is taking issues more seriously in the context of the credit crunch,’ remarks an Ethos spokesperson.

The shareholder activist group is also lobbying for AGMs to allow investors the right to vote on share-based incentive plans, a measure that is already in force across the US, the UK, the Netherlands and France. Ethos also says shareholders should be able to vote on the remuneration report, separately from the annual report, as is the case in the UK, the Netherlands, Australia and Sweden, and possibly in the US in the near future.

Members of Ethos are waiting to see what the Swiss government comes up with but, even if their points are taken into account, there is no guarantee the legislation would be applicable any time soon. ‘The proposal of the bill will be put forward to the Swiss parliament next week, but it may take half a year to push it through,’ the Ethos spokesperson continues.

The Swiss government was unavailable for comment, but Ethos is convinced shareholder rights regarding executive remuneration are necessary to restore investor confidence and aid the efficient operation of financial markets.

By Fay Sanders

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