In September 2008, Ethos and eight pension funds tabled a “Say on Pay” resolution requesting ABB, Credit Suisse Group, Nestlé, Novartis and UBS to submit their remuneration report to an advisory vote of the shareholders.
Following the dialogue between Ethos and the targeted companies, Credit Suisse Group, Nestlé and UBS have accepted to pro-actively submit their remuneration system/report to an advisory vote of the shareholders at their annual general meeting. However, the resolution will still be maintained on the agenda of the annual meetings of Novartis (24 February 2009) and ABB (5 May 2009).
Ethos Foundation commends the decision of three of the five targeted companies to give the shareholders a say on executive remuneration. This is a step toward better self regulation with regard to executive remuneration and enhanced shareholder democracy in Switzerland.
UBS committed to put its remuneration system for 2009 to the advisory vote of the shareholders, whereas Credit Suisse Group and Nestlé will propose a vote on their 2008 remuneration report. The vote will be advisory, as currently Swiss company law does not permit a binding vote. Ethos considers that an advisory vote still allows the investors to send a strong signal to management with regard to remuneration.
The three companies must now disclose sufficient information in advance of the meeting in order to allow the shareholders to make an informed decision regarding the remuneration system/report. Ethos will analyse the remuneration policy and make voting recommendations in line with the criteria set in its proxy voting guidelines.
Ethos hopes that Novartis and ABB will follow the example of Credit Suisse Group, Nestlé and UBS and will also introduce an advisory vote of their remuneration system/report. By way of reminder, the recently established support group to the «Say on Pay» resolutions includes approx. 30 Swiss and non Swiss institutional investors with more than CHF 250 billion (EUR 170 billion) in assets under management.
Ethos and the eight Swiss pension funds maintain their “Say on Pay” resolution at the general meetings of Novartis (24 February 2009) and ABB (5 May 2009) and urge all shareholders to cast an affirmative vote.