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Will new rules on executive pay damage Swiss business?

On Sunday, Swiss voters overwhelmingly backed proposals to crack down on executive pay.

Shareholders will be able to veto executive remuneration, golden handshakes and parachutes will be banned, directors will have to re-elected every year and anyone who breaks the rules may go to prison.

It will apply to all Swiss companies listed on Switzerland's stock exchange.

The reforms are the brainchild of Swiss businessman-turned-politician Thomas Minder. But business groups are worried the new rules will damage Swiss competitiveness.

Speaking to the Today programme's Simon Jack, Professor of Law and Finance at the University of Zurich Kern Alexander said: "What's brought this about in Switzerland is a series of corporate governance scandals.

"The role of institutional shareholders is becoming greater in corporate governance. Those shareholders exercise more influence and oversight in corporate governance affairs and so that trend in share ownership where institutions are playing a greater role will lead to more activism."

Alan MacDougall, Managing Director of UK shareholder group Pensions & Investment Research Consultants (PIRC), said: "There's a large scale public anger at work about the problem of pay. There's generally a big revulsion about the problems created by executive pay."

First broadcast on BBC Radio 4's Today programme on Monday 4 March 2013.