Executive compensation and employee benefits—Switzerland—Q&A guide

The following Share Incentives practice note provides comprehensive and up to date legal information covering:

  • Executive compensation and employee benefits—Switzerland—Q&A guide
  • 1. Provide an overview of the primary sources of law, regulation and practice that govern or affect executive compensation arrangements or employee benefits.
  • 2. What are the primary government agencies or other entities responsible for enforcing these rules?
  • 3. Are any types of compensation or benefits generally subject to specific corporate governance requirements or approval by shareholders or government agencies? What is the general process for obtaining approval?
  • 4. Under what circumstances does the establishment or change of an executive compensation or benefit arrangement generally require consultation with a union, works council or similar body?
  • 5. Are any types of compensation or benefit arrangements prohibited either generally or with respect to senior management?
  • 6. What rules apply to compensation and benefits of non-executive directors?
  • 7. Must any aspects of an executive’s compensation be publicly disclosed or disclosed to the government? How?
  • 8. Are employment agreements required or prevalent? If so, what provisions are common? Are any terms prohibited or unenforceable?
  • 9. What are the prevalent types and structures of incentive compensation? Do they vary by level or type of organisation?
  • More...

Executive compensation and employee benefits—Switzerland—Q&A guide

This Practice Note contains a jurisdiction-specific Q&A guide to executive compensation and employee benefits in Switzerland published as part of the Lexology Getting the Deal Through series by Law Business Research (published: November 2020).

Authors: Pestalozzi (Zurich)—Martin L Mueller

1. Provide an overview of the primary sources of law, regulation and practice that govern or affect executive compensation arrangements or employee benefits.

Executive compensation arrangements are primarily governed by the federal statutory provisions contained in the Swiss Code of Obligations (CO), specified to a certain extent by cantonal or federal case law. The CO does not distinguish between executive and non-executive employees. The provisions set out in the CO regarding (executive) compensation include regulations on salary, commissions, bonuses, payment terms and periods, and participation in the success of the business.

With regard to listed Swiss companies, the federal Ordinance against Excessive Compensation in Listed Companies (CompO) is applicable. The CompO sets out, inter alia, the permissible types of compensation for executive management, board members and the advisory council (if any), and states’ obligations relating to the disclosure of such compensation as well as the shareholders’ ‘say-on-pay’ rights.

Specifically, regarding the banking industry, the Swiss Financial Market Supervisory Authority has issued Circular No. 2010/1 ‘Minimum standards for remuneration schemes of financial institutions’.

Mandatory payments and salary deductions must be made for the benefit of different social

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