The subject of executive compensation seems to always generate controversy. Increasingly, it has become a very hot and politically-charged topic. This paper examined the Abzocker-Initiative (“Minder-Initiative” or “say-on-pay”), including the specific provisions that passed in the resolution and the pros and cons of the approved initiative. Say-on-pay, especially the type that has a binding effect, is a critical mechanism for shareholders to express their voice and opinion on corporate matters. For the Swiss people, the era of shareholders delegating all such matters to the Board of Directors (“BODs”) is behind them, the new order requires shareholders to have a direct say on executive compensation. Specific provisions that passed in the referendum include, among others, mandatory annual binding shareholders’ vote on the aggregate compensation of the BODs, executive management and advisory board; and prohibition of golden hellos and golden goodbyes. Finally, the paper discussed the contagion effect of the Abzocker-Initiative and its variants in other jurisdictions.
Keywords: Abzocker-Initiative, Binding-Vote, Executive Compensation, Golden goodbyes, Golden hellos, Minder-Initiative, Rip-off Initiative, Say-on-Pay
