March 5 - European executive pay comes under attack for a second time in less than a week after Swiss voters backed some of the world's strictest controls on corporate wages - but what impact will it have? Joel Flynn reports.
Bonuses are back in focus, and the Gordon Geckos out there won't like it. Switzerland's citizens have voted in some of the world's strictest controls on executive pay. SOUNDBITE: Unnamed passerby, saying (French): "I think they're overpaid and at the same time, their bonuses are too much. We must think of others who aren't able to earn enough." SOUNDBITE: Swiss voter, Helena, saying (French): "I think it is a form of blackmail to say: if top managers are not better paid they will go elsewhere, I think we need international agreements to stop that." The Swiss vote will give shareholders a binding say on executive pay. It will also ban golden hellos and goodbyes, introduce yearly elections for company directors and add the threat of criminal sanctions to anyone who doesn't comply. It's the second time in days that executive pay in Europe has come under attack. Last week the EU proposed capping bankers' bonuses to twice their salaries. But Praefinium Partners Founding Partner, Alpesh Patel, says it's about time shareholders were put first. SOUNDBITE: Praefinium Partners Founding Partner, Alpesh Patel, saying (English): "I'm actually one of those individuals quite loathe to offer these annual-type bonuses because I really think they need to be examined over five years, not least because when you look at, say, HSBC's share price performance over those longer periods, depending on the period you take they actually haven't gone anywhere in terms of returning anything to shareholders, and that is the only thing that matters." Corporate lobby groups such as Economiesuisse have warned international talent could be scared off. Bankers certainly fear the EU proposals could drive top staff to Asia or the U.S. But Reuters Breakingviews' Chris Hughes said the issue is more complex than just pay. SOUNDBITE: Reuters Breakingviews Assistant Editor, Chris Hughes, saying (English): "The best executives have a sort of healthy relationship with money -- they like it just enough, but they're not totally driven by that extra dollar. There are other things that keep them in position, so whether it's going to cause a mass migration I'm not so sure." Switzerland has long been known as a tax haven. Ten percent of the world's billionaires live in the tiny country and one in ten households have more than a million dollars. But that could be about to change. When it comes to pay, Swiss company execs may find it's no longer plain sailing.