SWITZERLAND - Swiss shareholders should have direct competence concerning remuneration policy, says Ethos, the socially-responsible asset manager created by two Geneva-based pension funds.

"The objective being to share responsibility, a compromise solution would be to give shareholders an advisory vote on the remuneration policy alone," says Dominique Biedermann, director of the Ethos, in a discussion paper on remuneration policy.

Biedermann welcomes a draft revision of Swiss Company law, currently being prepared by the Department of Justice, though warns it is fanciful to believe a company's board of directors would propose shareholders have a say on remuneration policy.

It is left to shareholders to propose, via a shareholder resolution, the inclusion of a provision on remuneration in the company's articles of association, argues Biedermann.

"However, the resolution would have to garner over 50% of votes to enter into force," which is therefore not a satisfactory solution, according to Ethos.

Ethos, which looks after CHF2.3bn (€1.4bn), most notably from pension funds, is the latest to join a line of institutional investors stepping up discussion about corporate remuneration policy.

Earlier this month, a pension fund revolt loomed over Anglo-Dutch oil giant Shell's salaries, when the Pensions Investment Research Consultants (Pirc) recommended Royal Dutch Shell investors vote against the company's remuneration report at the oil major's annual meeting.

This call also came after the Local Authority Pension Fund Forum (LAPFF), the activist public sector fund coalition, announced in April it would urge its members to vote against Shell's remuneration policy.