PUBLIC wrath at the widening gap between packages awarded to company bosses and the average citizen’s take-home pay resounded through Switzerland on March 3rd. Voters there overwhelmingly backed an initiative to give shareholders of Swiss listed companies a binding say on executive pay and an annual right to vet board appointments. Other sanctions would forbid the award to executives of severance packages, side contracts, and rewards for buying or selling company divisions. The penalty for infringements could be as much as three years in jail, or the forfeit of up to six years’ salary. This is powerful stuff—although the results of the 68 % vote in favour still need to be translated into workable laws. Some cynics suggest this could take as much as ten years. As a starting point, the text of this “people’s initiative”, which has been in the works since 2008, will be written into the Swiss constitution. Then it is up to the various organs of Swiss government to put it into law. The Federal Council (Bundesrat) must formulate the constitutional change within a year.

The Swiss business community has been shaken by this outburst of populism and argues that it endangers Switzerland as a place to locate companies. A “counter-initiative” offering shareholders stronger voting powers, but without threatening criminal sanctions, was rejected by the electorate on polling day. Economiesuisse, the Swiss Business Federation, accepts the public vote, but says such complex and emotionally-charged changes should be implemented with great care.

The initiative against “Abzockerei” (roughly translated as fatcat pay) was started by Thomas Minder (pictured), a family entrepreneur from Schaffhausen. It gained additional momentum in January on news that Novartis, a Swiss pharmaceuticals company, intended to pay its departing chairman Daniel Vasella a severance package of SFr72m ($76m). Mr Vasella later refused the package.

The people’s initiative foresees that shareholders will be able to vote bindingly at annual general meetings on the total amount of pay awarded to board members and on ratifying their appointments for the next year. Pension funds must vote in the interests of their members and make public how they have voted. Board members may be offered no golden hello or severance package, nor can they have consulting or other contracts with firms in the same group.

Given the worldwide debate on levels of pay and other rewards, particularly at banks which have cost the taxpayer money, the Swiss plebiscite is a reminder that resentment can rumble, even in an affluent society. Whether any joint-stock company can actually be run on populist lines is another question.