Now, Switzerland moves to curb excessive executive pay packets
Bern/New Delhi: Amid rising concerns over exorbitant remuneration, Swiss people have favoured a plan to curb excessive pay packets doled out by companies to its top executives.
The plan, once in place, would empower stakeholders of Swiss firms to decide on compensation for top executives including board members, according to media reports.
The latest move comes close on the heels of pharma giant Novartis deciding to scrap golden parachute package for its former head Daniel Vasella following public outrage.
According to the Wall Street Journal, Swiss voters on Sunday overwhelmingly backed a plan giving shareholders sweeping authority over executive pay.
Roughly 68 percent of those who voted supported the Minder Initiative, named after the businessman and politician who created it, the report said.
"The 24-item measure enables shareholders of Swiss companies to approve or block proposed compensation for corporate executives and board members," the daily noted.
High executive pay has come under criticism worldwide, especially after the 2008 financial meltdown. Since then, many countries have taken steps to curb such exorbitant remunerations.
Recently, the European Union had proposed to cap the bonus paid to top executives.
In India too, steps have been initiated to curb excessive executive compensation.
Earlier this year, capital market regulator Securities and Exchange Board of India (Sebi) proposed wide-ranging overhaul of corporate governance norms for listed companies, through measures like checks against unjustifiable CEO pay.
Sebi, in a discussion paper, had suggested greater alignment of CEO salaries with the performance and goals of the company.
Sebi had said "that, on average, the remuneration paid to CEOs in certain Indian companies are far higher than the remuneration received by their foreign counterparts and there is no justification available to that effect."
Besides, the regulator had proposed mandatory disclosure by the listed companies of ratio of remuneration paid to the each of their directors and their median staff salary.
Such a disclosure has already been proposed in the Companies Bill 2012 for all public companies.