Swiss pension giant Publica “can live” with Minder executive pay proposal ahead of next month’s vote

CEO contradicts claim by Swiss pension lobby that benefits will be squeezed.

Publica, Switzerland’s biggest pension scheme with CHF32bn (€25.9bn) in assets, has contradicted a claim by ASIP, the country’s pension fund lobby, that an initiative to curb excessive executive pay threatens benefits. The Swiss are to decide on March 3 whether to adopt the initiative, which is the brainchild of Thomas Minder, a small businessman turned politician. If this happens, Swiss pension schemes will be obliged to vote on executive pay at the country’s listed companies and inform their shareholders on how they voted. Of their CHF620bn in assets, Swiss pension funds have around CHF140bn invested in domestic and foreign equities. Speaking to Responsible Investor, Publica CEO Dieter Stohler said: “ASIP is correct that Minder will mean more work for Swiss schemes. But that does not mean benefits will come under pressure. Benefits get squeezed by other factors like historically low interest rates. Publica can live with Minder.” ASIP calculates that the voting requirement enshrined in Minder will mean between 150 and 300 hours of additional work for each scheme. The association says the funds that lack the resources to deal with this will have to make new hires or rely on outside help, resulting in higher costs and lower benefits. Stohler also told RI that Minder was important in combatting the “rip-offs” taking place at some Swiss firms. “Even though I personally feel that the government’s counter-proposal is better and will therefore vote for it, Minder is a step in the right direction,” he said. Should, contrary to current polls, the initiative fail, the counter-proposal will take effect. That proposal allows pension funds to decide which votes on executive pay are binding and which are not. It further allows the schemes to vote on the way executive compensationis structured and not just on total pay. Beyond Publica’s acceptance of Minder, ASIP has been criticised by a director at BLVK, a CHF5.2bn scheme for teachers in the Swiss capital of Berne, for voicing just the board’s view of the initiative and not that of Swiss schemes. “I consider this to be undemocratic,” BLVK director Christoph Zürcher told the SonntagsZeitung, a Swiss newspaper. ASIP president Christoph Ryter replied that it was not feasible for the association to ask its 1000 members what they thought of every political issue. “And anyway, our democratically-elected and widely representative board unanimously agreed to reject the initiative,” said Ryter. In an upcoming interview with RI, Ryter outlines ASIP’s reasons for opposing Minder, noting for instance that Swiss schemes already engage with listed firms on executive pay. Swiss business lobby economiesuisse, which has spent CHF8m on a public campaign to defeat the initiative, has decided not to release a film about what could happen to Switzerland if the initiative succeeds. The film portrays a Switzerland in 2026 that has been completely impoverished and is plagued by hunger. Swiss hotel managers and shopkeepers sob as they tell German television reporters how they lost their jobs, while Lucerne’s Chapel bridge (pictured) is dismantled to provide firewood for the winter. Said economiesuisse: “As the video could be perceived as an unnecessary provocation during the democratic process, we’ve decided not to show it.” The film made by Swiss director Michael Steiner in Hungary cost the lobby CHF200,000. Steiner dismissed the notion that the film deliberately sought to scare people. “I think that viewers understand why it was over-stylised. But, as the creator, it’s difficult for me to judge,” he told Swiss daily Tages-Anzeiger.