WASHINGTON (MarketWatch) — Switzerland is rarely thought of as a bastion of radical firebrands, but more than two-thirds of Swiss voters this weekend approved a referendum initiative that is the most draconian curb anywhere on executive compensation.

The measure gives shareholders a veto — a real veto, not a pretend one — over executive pay and bans signing bonuses, golden handshakes and golden parachutes. It applies to all of the country’s public companies, and violations are punishable by prison.

The referendum was not a vote against capitalism but a vote against greed. The measure was opposed by the Swiss business lobby and the major political parties, but it was approved overwhelmingly in all 26 cantons of the Swiss Confederation.

The Swiss have sided with the populists in pushing back against Europe’s corporate and political elites.

The Swiss vote followed on the heels of last week’s proposal by the European Union to limit bankers’ bonuses to a maximum of twice their salaries. Together the two measures signal a political backlash against corporate overreach in a continent wracked by recession.

In Europe, the decisiveness and nature of the Swiss vote was seen as fueling populist protest parties, like the Five Star Movement of comedian Beppe Grillo, which captured 25% of the vote in last week’s national elections in Italy. Much of Grillo’s rhetoric has been directed against the greed and corruption of Italy’s political and business leaders. Related column by David Marsh: 10 reasons the euro crisis may be incurable.

“In Switzerland, the citizens have decided against the boundless enrichment of managers,” wrote columnist Jakob Augstein in the German newsmagazine Der Spiegel. “In Italy, the government of technocrats was defeated. There is a populism of reason that is called democracy.”

In France, the liberal daily Libération had this front-page headline: “Cap on bosses’ salaries: Let us do like the Swiss.”

Heinz CEO's golden parachute

Behind the growing restiveness of European voters is the perception that governments are propping up banks and big business, which continue to pay huge bonuses to executives with that subsidy, while imposing austerity on the wider public.

The Swiss initiative itself predates the financial crisis. Thomas Minder, an independent member of the Swiss parliament, launched the initiative after his small business, which manufactured toothpaste and counted Swissair among its big clients, was almost bankrupted when the airline collapsed in 2001 after paying millions to a new CEO to save it.

But the effort gained traction after the financial crisis broke and the giant Swiss banks needed support from the government. The final straw came last month when Swiss chemical company Novartis NOT, +0.13% NOVN, -0.95% gave departing CEO Daniel Vasella a golden handshake of some $78 million, which created such an uproar that it was rescinded.

The Swiss business confederation warned that approval of the referendum would hurt the country’s investor-friendly reputation.

The argument echoed the one by the British government against the EU’s planned limits on bonuses in the financial-services industry — that such a measure would make the firms pull up stakes and go elsewhere.

European voters, however, now seem willing to call that bluff. They are simply fed up with the disparity between “fat cats” reaping excessive pay packages while everyone else is tightening their belts.

British Chancellor of the Exchequer George Osborne was the only official to argue against the bonus limit at this week’s meeting of EU finance ministers, which gave a green light to finalization of the measure.

Europe’s established political parties are belatedly reacting to the populist backlash. In Germany, which will hold national elections in the fall, leading politicians praised the Swiss initiative.

Rainer Brüderle, who is heading the election campaign for the Free Democrats, the junior partner in the current coalition, said Germany should emulate the Swiss pay curb and “set an example” for Europe.

Officials of the opposition Social Democrats also called for tougher pay curbs. Chancellor Angela Merkel’s Christian Democrats, though, were more circumspect, saying any such measures should be Europe-wide.

In France, Prime Minister Jean-Marc Ayrault said that the Swiss “often show the way, and personally I think we should take inspiration.”

All this comes as Italy’s Grillo is holding out against any alliances that would enable a new government to take power in Italy in what appears to be a ploy to force new elections that could give his populist movement an even bigger share of the vote.

Switzerland, secure in its mountains, has maintained its stability through centuries of European turmoil. But with this week’s vote, it has now become part of a political earthquake that could further undermine Europe’s beleaguered leaders.