Last weekend, voters in Switzerland strongly backed a plan giving shareholders unprecedented authority over executive pay. The Minder Initiative, named after the Swiss businessman who created it, was supported by approximately 68% of Swiss voters. The measure gives shareholders of Swiss companies the power to approve or block proposed compensation for executives and directors.
Novartis AG and UBS AG are two of the multinational companies listed in Switzerland that will be affected by the Minder proposals. The proposals now go to the government for legislative drafting. Implementation is not expected until 2014 at the earliest.
Switzerland has provided a supportive environment for Mr. Minder's ideas. In 2008, the Swiss government was forced to bail out UBS, the country's largest bank. Also lending support to the success of the Minder Initiative was Daniel Vasella, the departing chairman of Novartis. He was to receive 72 million Swiss francs ($76 million) over six years as part of his exit. Novartis went back to the drawing board on Mr. Vasella's package after it created backlash among the Swiss people.