One-third of Swiss companies accept 'say-on-pay' vote
SWITZERLAND - Growing pressure from shareholders has pushed 33 of the largest 100 listed companies in Switzerland to introduce a shareholder vote on remuneration, according to the Ethos Foundation.
The organisation - established by two pension funds in Geneva - has set up the Ethos Engagement Pool, which has seen a jump in membership from 30 at the beginning of 2010 to more than 100.
Dominique Biedermann, executive director at Ethos, said: "Our members have around CHF100bn (€77.3bn) in assets under management, and this helps us in our negotiations."
Biedermann said he was proud that one-third of the largest Swiss companies had introduced a "say-on-pay" vote voluntarily, but he pointed out that two-thirds still had not.
Ethos has now published a list with all companies and their decisions on the subject.
In Switzerland, there is no legal requirement for any shareholder say in a company's remuneration scheme. Biedermann criticised Swiss shareholders and the fact that, in 2010, the average participation rate at Swiss general meetings was only around 55%.
Ethos contends that institutional investors such as pension funds should be required to "systematically exercise" their voting rights.
But Biedermann said he was optimistic given that the number of Pensionskassen in the Ethos Engagement Pool was growing despite the fact members had to pay for it.
Members pay 0.4 basis points of their Swiss equity exposure each year for the shareholder engagement service.
Ethos is also a signatory to the Principles of Responsible Investment (PRI), and Biedermann noted that, in cases where engagement dialogue had broken down, the foundation would use the PRI's platform to rally support from other countries.
The first acid test for the voluntary say-on-pay votes will be at the Novartis general meeting on 22 February, as the company has introduced this vote for the first time this year.