In March 2013 Swiss voters approved a referendum against rip-off salaries, which called for constitutional rules regarding the control of executive pay and the improvement of corporate governance in Swiss listed companies (the 'fat cat initiative'). Because the initiative was not directly applicable, it required the Federal Council to adopt an interim ordinance to give its rules direct legal effect. The Ordinance against Excessive Compensation entered into effect on January 1 2014 and remains applicable until Parliament has debated and adopted a bill in order to amend ordinary Swiss legislation.
The ordinance aims to limit remuneration of executives in Swiss listed companies by improving corporate governance and giving shareholders increased influence over the amount and form of executive compensation. The new ordinance is particularly striking as it includes penal provisions and provides for the criminal liability of executives who grant or accept certain kinds of excessive compensation.