Thomas Minder, the architect of the eponymous initiative to combat “fat cat” pay at listed Swiss firms, is critical of Justice Minister Simonetta Sommaruga for unveiling a draft law on the initiative that contains several loopholes.
In his first interview since the Swiss approved the initiative on March 3, Minder told public television that the draft law was far too vague on the ban of recruitment bonuses for executives. Beyond banning those bonuses outright, the Minder initiative forbids golden parachutes and requires shareholders to take binding votes on executive pay.
Minder also said it was wrong that listed firms in Switzerland would be given two years to adopt the new rules. Minder and his fellow campaigners, Claudio Kuster and Brigitta Moser-Harder, want them to be in place for the 2014 annual general meeting season.
“The spirit of our initiative was to stop corporate greed from entering the back door. I am not sure that Ms Sommaruga has lived up to that spirit,” said Minder, who is an MP in Switzerland’s upper house of parliament with no party affiliation.
Sommaruga’s draft law has been sent to the Swiss parliament for debate and possible changes. As part of that process, the affected parties, including employers, unions, pension funds as well as the campaigners for Minder, have sent the government their comments on the initiative.Another of the law’s controversial elements is a waiver from voting requirements for Swiss pension funds. According to the third paragraph of Article 22, the schemes may abstain or not vote at all if this “serves the interests of beneficiaries.” The article also leaves it up to the schemes’ managers to decide what those interests are. This has pleased Swiss pension fund association ASIP, which calls the draft law a “workable solution.”
But in a letter to Sommaruga, Minder’s colleague Moser-Harder demanded that the waiver be struck so that pension funds vote on pay at AGMs of all listed Swiss firms. She said their voting could easily be done electronically, adding that ASIP was mistaken in fearing a “cost-explosion.” “As far as the voting costs are concerned, several public pension funds, including Publica (for Swiss government employees) and the BLVK (for Swiss teachers) have already made clear that there will be just a moderate increase.”
Moser-Harder got some support from the Swiss trade union association SGB. In separate comments to Sommaruga, SGB said the waiver should be re-written so as to be clear on exactly when Swiss pension funds would not have to vote.