Swiss citizens back executive pay curbs in referendum

ZURICH (REUTERS) - Swiss citizens voted on Sunday to impose some of the world's strictest controls on executive pay, forcing public companies to give shareholders a binding vote on compensation.

The government said 67.9 percent of voters had backed allowing shareholders to veto executive pay proposals as well as banning big rewards for new and departing managers, one of the highest approval rates ever for a popular initiative.

While anger at multi-million dollar payouts for executives has spread around the globe since the financial crisis, Swiss direct democracy - including four national referendums a year - means public outrage can be translated into strong action.

Brussels agreed a cap on bankers' bonuses last week and countries including the United States and Germany have introduced advisory "say on pay" votes. Britain also wants to give shareholders a binding vote on pay and "exit payments" at least every three years, but the Swiss plans go further.

The clear majority in pro-business Switzerland was unusual given fierce campaigning by corporate lobby group Economiesuisse, which warned the proposals would damage the country's competitiveness and scare away international talent.

Support for the move was driven partly by big bonuses blamed for fuelling risky investments that nearly felled Swiss bank UBS , as well as outrage over a proposed US$78 million (S$97 million) payment to outgoing Novartis chairman Daniel Vasella.