* Government rejects Minder plan for executive pay
* Swiss to vote on the plan in March 3 referendum
* Government prefers more limited parliament proposal
* Firms say Minder plan would damage competitiveness
ZURICH, Dec 18 The Swiss government opposes a
plan to clamp down on excessive executive pay due to be voted on
in a referendum, saying the proposals go too far and could even
encourage the short-term thinking they aim to stamp out.
Instead, the cabinet on Tuesday backed a more limited
initiative to boost shareholder control over executive pay which
has already adopted by parliament and will come into force if
the plan being put to referendum on March 3 is rejected.
That plan is the brainchild of small
businessman-turned-politician Thomas Minder, who launched his
drive for reform in 2008 after huge losses at Swiss bank UBS
were blamed on a bonus culture that drove managers to
take too many risks.
"The government shares the basic concerns of the initiative
but is of the opinion that some of the proposed measures go too
far and are in part even counterproductive," it said in a
It said the planned limiting of the term of board members to
one year risked promoting precisely the kind of short-termism
Minder criticises, while it said other provisions regulating
complex compensation schemes were not practicable.
Minder's proposals include ensuring shareholders have a
binding vote on compensation and banning practices like "golden
handshakes" - or big payouts - for new hires and "golden
parachutes" for departing managers.
The Swiss business lobby is vigorously campaigning against
the initiative, saying it will drive away investment and cause
an exodus of talent.
Many of the biggest Swiss companies already offer investors
a say on pay, though these have not been binding, and only a few
have delivered defeats for management proposals.
Alongside a binding vote on the pay of managers and board
members, the Minder initiative would force pension funds to vote
at shareholder meetings and disclose their voting records.
It would also let shareholders stipulate the number of
additional positions board members can hold outside the company
and allow shareholders to vote online.