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New Corporate Governance Rules for Swiss Public Companies 

by Lucas Hänni and Alexander Nikitine

Published: April, 2013

Submission: April, 2013

 



On 3 March 2013, the Swiss electorate approved the Minder Initiative, which will fundamentally change the legal framework on executive compensation and other corporate governance matters for Swiss public companies. The implementation of the Minder Initiative will be the task of the Federal Council and the Swiss Parliament. While many aspects around such implementation will remain unclear for the months and years to come, the new rules will definitely require substantial changes to the Articles and other company documents.


Requirements of Minder Initiative – 

New Paragraph 3 of Article 95 of Swiss Federal Constitution According to the Minder Initiative, introducing a new paragraph 3 of article 95 of the Swiss Federal Constitution («FC»), Swiss (and only Swiss) companies whose equity securities are listed on a Swiss or foreign stock exchange need to brace themselves for the following key changes: 


Say-on-Pay

The general meeting of shareholders («GM») shall vote on the aggregate compensation amount of the Board, the executive management and the advisory board (Beirat). Such vote is mandatory and binding. Severance or «other» compensation payments, advance payments, transaction incentive payments to members of the Board or the executive management are prohibited. Additional consulting or employment agreements with such members are no longer permitted either.


New Election Procedures

The GM shall elect the chairman of the Board, and, individually, each Board member as well as each member of the compensation committee. The GM shall further elect the independent proxy (unabhängiger Stimmrechtsvertreter). Representation by the corporate proxy (Organvertreter) or the depositary proxy (Depotstimmrechtsvertreter) shall no longer be permitted. Electronic voting by shareholders shall be allowed. Pension funds must cast their votes in the interest of the insured and disclose how they voted. 

 

 

 
 

 

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