Following the issuance of specific 'fat cat' regulations in 2014 – applicable to stock-quoted companies – the federal government proposed that fixed and flexible compensation packages of board members and high-ranking management in state-owned enterprises (eg, Swiss Post, Swiss Railways, Swiss Tourist Agency, Skyguide (the federal control agency for Switzerland's civil and military airspace) and RUAG (a provider of military land and air technology, including space defence systems) should be regulated by the end of November 2016.

As a cornerstone of the federal government initiative, flexible compensation elements (particularly bonuses) can no longer exceed 50% of the fixed salary, and fringe benefits (eg, representational expenditures or car allowances) cannot exceed 10% of the fixed salary. To that end, articles of association applicable for the first time in 2018 will be amended in the annual general meetings held in 2017.

The new fat cat regime is also a modest approach to address political and social concerns in the public sector, though it provides no rules capping fixed salary. As a result, companies affected by the new law are not prevented from raising fixed compensation as long as bonuses, for example, do not exceed the 50% ceiling. Moreover, important state-owned companies that are stock quoted (eg, Swisscom) or quasi state-owned (eg, Swiss television company SRG) are exempt. The Financial Market Supervisory Authority is also not affected by the new fat cat regulations.

For further information on this topic please contact Thomas Rihm at Rihm Rechtsanwälte by telephone (+41 44 377 77 20) or email ([email protected]). The Rihm Rechtsanwälte website can be accessed at