As reported in the New York Times here, on March 3, Swiss voters approved a new law that gives shareholders of companies listed on the Swiss stock exchange binding “say-on-pay” votes over executive compensation. The law also bans golden parachute and golden handshake arrangements and imposes civil (a fine of up to 6 years of salary) and criminal penalties (up to 3 year in prison) on violators.

Switzerland is the second developed nation (following the Netherlands) to require mandatory, binding sharheolder “say-on-pay” votes. Australia has a variant “two-strikes” rule that requires the entire board of directors to stand for reelection if at least 25% of shareholders vote against executive compensation at two consecutive meetings. The UK has proposed making “say-on-pay” votes binding but the proposal has not yet been adopted.