Citizens' initiative Against abusive remuneration

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Following the citizens' proposition "against excessive pay", the government proposed changes that went less far than the citizens' proposition. This government counter-proposal is submitted to the parliament only if the people reject the citizens' proposition described below. The government's counter-proposal is not described here.

Text submitted to vote

I. The Federal (Swiss) Constitution of April 18, 1999, is supplemented as follows:

Art. 95, al. 3 (new)

In order to protect the economy, private property and shareholders and to ensure sustainable business management, Swiss public limited companies listed on the stock exchange in Switzerland or abroad are required by law to respect the following principles:

a) the general assembly votes each year the total amount of remuneration (money and value of benefits in kind) of the board of directors, management and the advisory committee. It appoints each year the chairman of the board of directors and, one by one, the members of the board of directors and the members of the remuneration committee as well as the independent representative. Pension funds vote in the interests of their policyholders and communicate what they have voted. Shareholders can vote remotely electronically; they cannot be represented by a member of a corporate body or by a depositary;

b) the members of the bodies do not receive any severance or other indemnity, any early compensation or bonus for the purchase or sale of businesses, and may not be bound by another consultancy or employment contract with a group company. The management of the company cannot be delegated to a legal person;

c) the statutes regulate the amount of pensions, credits and loans granted to members of the bodies, bonus and participation plans and the number of external mandates of the latter, as well as the duration of the employment contract of members of the management ;

d) any violation of the provisions provided for in the letters a to c will be punished with a custodial sentence of up to three years and a financial penalty of up to six annual salaries.

II. The transitional provisions of the Federal Constitution are supplemented as follows:

Art. 197, c. 8 (new)

Transitional provision ad. art. 95, al. 3

By the time of the entry into force of the legal provisions, the Federal Council will enact, within one year of the acceptance of art. 95, al. 3, by the people and the cantons, the necessary implementing provisions.

That's what the proponents say

The initiative brings significantly improved shareholder democracy and rights. Consultative surveys on compensation have so far had no effect in reducing abusive remunerations.

The initiative brings a locational advantage: since the initiative was launched, many international companies have relocated their headquarters to Switzerland.

Rapid implementation of the popular initiative is guaranteed: the Federal Council must issue the implementing provisions within one year.

In the case of Parliament's counter-proposal, back doors and loopholes remain wide open: Only about 38 percent of the initiative requests were accepted.

The Company-law is revised several times a year without popular votes. Since the government's counter-proposal only changes the Company-law and not the constitution, it is too easy to change the counter-proposal again or to water it down even more.

Fundamental articles of law of the counter-proposal come from lobbyists of the Economie-suisse and thus from the business bosses themselves.

There are enough examples of very competent company managers even without excessive compensations. And if a few super-rich managers should leave Switzerland because of a referendum, they could easily be replaced. The Swiss can do very well without these unscrupulous rip-off-managers.

That's what the opponents say

The initiative endangers Switzerland's successful model and puts jobs at risk.

The initiative increases costs and bureaucracy for our companies. However, it does not prevent excessive wages or bonuses.

The initiative severely restricts the entrepreneurs in their ability to act.

With regard to the regulation of company-law of stock market listed corporations, the initiative goes far beyond all other comparable countries. It makes Swiss company-law the most rigid in the world.

The initiative also affects small and medium-sized companies. Formally, it only applies to stock-market listed companies. But in Switzerland big and small companies are closely connected. We mustn't jeopardize that.

The initiative creates an expensive and nonsensical bureaucracy for pension funds. This money is then missing from our pensions.

Only in the event of a "no"-vote to the popular initiative will the broadly supported counter-proposal of the Parliament come into force. This reaches the goal and works faster against rip-off-managers.

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