Shareholders in Switzerland are voting against top managers’ bonuses like never before, a new study shows.
Top Swiss managers are facing pushback from shareholders over their pay, shareholder consultancy Swipra said in a report Thursday.
During the 2021 run of annual general meetings, the average proportion of votes against the remuneration reports on CEOs’ pay hit an all-time high of 14.4 percent.
Swipra said the coronavirus crisis in particular bolstered opposition to higher bonuses. Swiss financial watchdog Finma recommended restraint on top pay and dividends in the financial services sector.
More Active Shareholders
Average participation by total shares in a company rose 0.3 percentage points to 70.9 percent, the report said, putting an end to talk of a silent majority.
Major shareholders in Swiss companies are becoming increasingly vocal. The ten largest institutional shareholders holding an average of 12.8 percent of market capitalization voted “no” and did not follow the recommendations of voting consultants.
Making Displeasure Felt
Of the 100 AGM motions with the largest proportions of votes against, 65 percent related to the election of directors and 19 percent were remuneration reports. The average vote against remuneration reports was 32.2 percent. Credit Suisse’s top mangers were made to feel the displeasure of the bank’s major shareholders at April’s AGM after the double debacle of the Greensill supply-chain fund and hedge fund Archegos collapses.
Outgoing President Urs Rohner gave up part of his salary, and the director responsible for risk, Andreas Gottschling, did not stand for re-election.
Pay for Performance
Stewardship is increasingly being seen as an integral part of performance in the financial sector, particularly at a time when environmental, social and governance issues are becoming more and more important as investment criteria.
Pay falls under governance, and Swipra surveys show shareholders will in future demand transparency on both pay for performance and ESG criteria in the remuneration process.
