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Chris works from BRW's Sydney newsroom. He has previously written and edited in print and online for titles including The Australian Financial Review and The Australian.

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Swiss vote to put the brakes on executive pay and ban golden parachutes

Published 04 March 2013 09:17, Updated 04 March 2013 11:09

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Swiss vote to put the brakes on executive pay and ban golden parachutes

Thomas Minder (centre) celebrates after Swiss voters turned out in force to suopport his legislation curbing executive bonuses and remuneration. Photo: Reuters

Swiss voters have moved to put major restrictions on executive remuneration, voting to give shareholders a binding say in remuneration packages and banning golden parachutes.

In a ballot held on Sunday, a large majority of Swiss voters – 68 per cent according to exit polls – were in favour of the legislation put forward by independent Swiss MP and businessman Thomas Minder, which also forces superannuation funds holding shares in a company to vote in motions on executive remuneration.

Also banned under the legislation are sign-on and leaving bonuses, as well as bonuses paid when a company is bought out.

Switzerland’s business lobby has warned that the new rules could make the country unattractive to business and investors.

In Zurich, where polls stayed open later, exit polls showed a massive 71 per cent of voters appeared to be in favour of the legislation, The Guardian reported.

It’s thought that news of pharmaceutical group Novartis’ planned $US78 million payment to departing chairman Daniel Vasella – a move which sparked outrage in Switzerland when revealed in February – helped fuel voter enthusiasm for Minder’s legislative package.

The Swiss vote came just days after EU officials struck a new deal on pan-European financial rules that included a cap on bonuses paid to bank executives limiting them to one year’s salary.

Britain has distanced itself from the move, saying such limits could affect the competitiveness of its finance sector.

Prime Minister David Cameron has instead backed the plan developed for the British finance sector by Sir John Vickers.

“We are absolutely clear that we must be able to implement the Vickers plan in the UK, which in some ways is tougher than regulations that are being put in place in other European countries,” the BBC reported Mr Cameron as saying.

“We want to have this proper ring fence between retail banks and investment banks and the rules must allow that to happen.”

In Australia, Penrice Soda’s board was the first company to face and survive a shareholder spill motion under the “two strikes rule”, after the its remuneration report was voted down for a second time in October.

Australian two-strike companies

Ticker Company S&P/ASX Index Meeting date Est % for Est % against Abstain Turnout Legal result
MBN Mirabella Nickel Limited 200 15-May-12 55.23% 40.02% 4.75% 49.93% 57.98%
ROC Roc Oil Company 300 17-May-12 57.26% 39.94% 2.80% 47.26% 58.91%
BDR Beadell Resources Limited 300 24-May-12 63.52% 36.48% 0.00% 43.53% 63.52%
ELM Elemental Minerals Limited 300 31-May-12 67.12% 22.55% 10.33% 52.18% 74.85%
ALS Alesco Corporation 300 18-Sep-12 40.00% 59.24% 0.75% 52.18% 40.31%
COH Cochlear Limited 100 16-Oct-12 68.60% 30.85% 0.55% 61.69% 68.98%
FXJ Fairfax Media Limited 100 24-Oct-12 65.00% 34.38% 0.62% 73.02% 65.41%
MTU M2 Telecommunications Group Limited 200 26-Oct-12 64.50% 34.74% 0.76% 49.84% 64.99%
MGO Marengo Mining Limited FT 08-Nov-12 43.20% 30.77% 26.03% 70.16% 58.40%
MAH Macmahon Holdings Limited 200 09-Nov-12 70.83% 28.31% 0.86% 56.82% 71.45%
SSN Samson Oil & Gas Limited 300 09-Nov-12 49.53% 39.04% 11.43% 11.10% 55.92%
NSE New Standard Energy Limited 300 13-Nov-12 62.21% 24.23% 13.56% 39.73% 71.97%
LLC Lend Lease Group 100 15-Nov-12 73.86% 25.66% 0.48% 70.10% 74.22%
CCV Cash Coverters International 300 16-Nov-12 68.43% 30.89% 0.68% 54.60% 68.89%
SAR Saracen Mineral Holdings Limited 200 20-Nov-12 69.08% 26.00% 4.92% 52.90% 72.66%
KCN Kingsgate Consolidated Limited 200 21-Nov-12 69.73% 30.21% 0.06% 58.47% 69.77%
RFE Red Fork Energy Limited 300 23-Nov-12 60.22% 29.39% 10.39% 58.86% 67.20%
CFE Cape Lambert Resources Limited 300 23-Nov-12 70.01% 29.57% 0.42% 61.91% 70.30%
ORL OrotonGroup Limited 300 28-Nov-12 51.48% 48.44% 0.07% 41.03% 51.52%
ORE Orocobre Limited 300 30-Nov-12 45.20% 54.66% 0.14% 25.41% 45.26%
SOURCE: Ownership Matters

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