ZURICH – Julius Baer shareholders voted on Wednesday against the private bank's executive pay plan for 2012, the first time investors have rejected a Swiss firm's compensation proposals.
More than 63 percent of shareholders voted against the plan, which includes 6.68 million Swiss francs ($7.15 million) in 2012 compensation for Chief Executive Boris Collardi. Because the vote is non-binding, the pay plan will still go ahead.
"The board of directors will take the appropriate measures to work towards a positive vote at the next annual general meeting," Julius Baer said in a statement. A spokesman declined to elaborate on how the bank would respond.
Influential proxy advisory firm ISS had advised shareholders to vote down the pay plan, arguing it failed to give investors enough detail on bonuses, and did not defer shares awards for top managers, making them immediately available instead.
Baer's biggest shareholders are mainly large institutional fund houses like MFS Investment Management, Blackrock and Harris Associates.
The vote comes a month after Swiss citizens voted in a referendum to introduce some of the world's strictest controls on executive pay, including giving shareholders a binding vote on compensation at listed companies in future.
It is the first time shareholders have rejected the pay plans of a company in Switzerland, where fury over pay packages has run high since the government had to rescue UBS in 2008 over major losses on risky investments blamed on a big bonus culture.
Rivals UBS and Credit Suisse , which both face shareholders votes in coming weeks, have drawn criticism in recent weeks for their 2012 bonus plans.
Last year, more than one third of UBS's investors voted against the bank's pay scheme, including a 4 million franc signing-on fee for new chairman Axel Weber, while nearly one third of shareholders at Credit Suisse revolted on pay.
In February, Swiss drugmaker Novartis was forced to scrap a $78 million pay-off for outgoing chairman Daniel Vasella after widespread public outrage.
In March, Swiss citizens voted in favour of introducing shareholder vetoes for executive pay proposals as well as bans on big rewards for new and departing managers with one of the highest approval rates ever for a popular initiative.
($1 = 0.9340 Swiss francs)
(Editing by Emma Thomasson and Helen Massy-Beresford)