An Assessment of Executive Compensation in Switzerland With Reference to Referendum in March 2013 on Executive Pay
Adamu Yushau Usumanu
adamuusumanu@gmail.com
This Paper is Submitted in Partial Fulfillment of the requirement for Corporate Finance and
Governance course
SMC University
School of Management
Dr. Albert Widman
January 29 , 2014
Abstract
The citizens of Switzerland in March 2013, decided in a referendum that shareholders must determine Board Member, Chairmen and Executive pay. They also decided to restrict proxy voting and ban severance pay, bonuses, for the purchase and sale of companies. In addition, loans pensions, and remuneration in he form of stocks or profit sharing must be regulated by the bylaws of the company, and finally, individual board members, and chairmen be elected by shareholder every year and banned corporate proxy and the representation of shareholders by depository bank.
The executive compensation (executive pay) is composed of the financial compensation and other non-financial awards received by an executive of a firm. It is a mixture of salary, bonuses, shares of and/or call option on the company stock, benefits, and perquisites, ideally configured to take into account government regulation, tax law, the desires of the organization and the executive, and rewards for performance (Ellig,2002).
There was a dramatic rise in executive pay in the 1980s, relative to that of an average worker’s wage in the United States (The Guardian,2005). Observers differ as to whether this rise is a natural and beneficial result of competition for scarce business talents that can add greatly to
