* Swiss anger over big bonuses fuelled by UBS losses in 2008
* Big payout for outgoing Novartis chairman sparked outrage
* Business lobby warns plans could hurt competitiveness
* Companies seen finding ways around measures
ZURICH, March 3 (Reuters) - Swiss citizens look set to vote on Sunday to impose the world's strictest controls on executive pay, giving shareholders in public companies a binding vote on compensation.
Polls suggest a clear majority will back plans to give shareholders a veto on executive compensation and ban practices such as big payouts for new hires and departing managers.
Support for the proposal was fired by anger over the big bonuses blamed for fuelling risky investments that nearly felled Swiss bank UBS, as well as outrage over a $78 million payment to outgoing Novartis chairman Daniel Vasella.
Business lobby Economiesuisse has campaigned against the initiative, arguing it would damage the country's competitiveness and could scare away international talent.
It favours an alternative proposal agreed by parliament, which would force all listed companies to hold votes on executive pay although they would not be binding. That will come into force if the plan being put to referendum is rejected.
Low taxes, stable politics and business-friendly laws make Switzerland an attractive base for some of the world's top firms, which supporters of the proposals say are unlikely to relocate even after a "Yes" vote.
"Switzerland would be the country where the money is the safest and the shareholders would have the most say so that is where the investors would bring the money," Thomas Minder, the businessman-turned-politician behind the campaign, told Reuters.
While outrage at multi-million dollar payouts for executives has spread around the globe since the financial crisis, the Swiss system of direct democracy means populist proposals have a greater chance of implementation. Swiss citizens get to vote on a range of topics in up to four national referenda each year.
UBS UNDER FIRE
While the Alpine economy has fared relatively well through the financial crisis, the near collapse of flagship bank UBS in 2008 stoked anger among the Swiss, who blamed its heavy losses on rewarding bankers to make risky bets.
Last year, more than one third of UBS shareholders rejected the bank's plans for executive pay - including a 4 million franc signing-on fee for new German chairman Axel Weber - after a sub-par 2011 profit and a $2 billion rogue trading scandal.
And a public outcry last month forced Novartis to cancel Vasella's $78 million "golden goodbye".
But there would not have been enough opposition to block pay proposals at any of the top 100 listed firms, even if votes had been binding. While investor opposition to pay deals doubled between 2009 and 2012, it remained low at 14 percent.
And companies look set to get creative to reward executives if the referendum succeeds, just as banks in Europe are looking at ways around a cap on bonuses for their top staff agreed by European politicians on Thursday.
"If a company wants to pay a top executive 25 million, then they will find a way to do so regardless of the initiative," Rolf Soiron, chairman of cement maker Holcim and drugs industry supplier Lonza, told Reuters.
Switzerland might not have the world's toughest policies for long. Britain also plans to bring in binding votes on pay in late 2013 and the European Union is looking at measures to give investors a ballot on companies' compensation policies. (Additional reporting by Caroline Copley; Editing by Mark Potter)