Swiss chems oppose move to rein in executive compensation

25 January 2013 17:36  [Source: ICIS news]

LONDON (ICIS)--Switzerland’s chemicals and pharmaceuticals industry is opposed to a legislative initiative to rein in executive compensation, a trade group said on Friday.

In a referendum to be held in March, Swiss voters are called on to decide on the initiative, known as the “Minder initiative against abusive salaries.”

Minder would, if implemented, require that shareholders approve executive compensation, and it would essentially prohibit severance payments. Breaches against the new rules would be subject to severe legal sanctions.

However, Swiss trade group scienceindustries, which represents Switzerland-based chemicals and pharmaceuticals producers, said that initiative would risk jobs in Switzerland and would increase the costs and bureaucracy for companies and pension funds.

“The initiative limits businesses in their capacity” and would make Swiss corporate law the most rigid in the world, scienceindustries said. It called on voters to reject the initiative.

Nestle board chairman Peter Brabeck, in a recent opinion article he contributed to Swiss daily Neue Zuricher Zeitung, warned that should Minder be adopted, Switzerland would lose its place as a favourite headquarters location for international firms.

However, according to Swiss media reports, surveys found that a majority of voters back the initiative.

Under current Swiss corporate law, the board of directors decides on executive pay. However, some companies have granted shareholders an advisory role on those decisions.

By: Stefan Baumgarten
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