The Lugano Convention is a set of rules, enacted to facilitate the recognition and enforcement of foreign judgments within the European Union and states outside of the EU, namely three members of the European Free Trade Association (Switzerland, Norway and Iceland). This article briefly describes the Swiss perspective, explaining the Swiss legislation relevant to the revised Lugano Convention, with a particular focus on the newly enacted Swiss Federal Civil Procedure Code on January 1, 2011. Other amendments in the codified law, are also relevant to the application of the revised Lugano Convention because matters related to the recognition and enforcement of judgments have to be applied in connection with the civil procedure law of the lex fori, that is the forum where the lawsuit is pending. These legislative changes are relevant for every party from a signatory state of the revised Lugano Convention which expects to face a lawsuit in Switzerland or wants to avoid a lawsuit there.
The debate about the compensation of executives and directors is a discussion about incentives and agency costs. This article analyzes basic tools to reduce agency costs and also assesses the ongoing debate about the future regulation of the compensation of executives and directors. It draws upon legislative experience from the United States. Recently proposed legislation in Switzerland attempts to empower shareholders with the draft of the Swiss Code of Obligations (CO). The main motivation behind this draft law is the reduction of excessive executive compensation. Directors and shareholders with a higher degree of independence might be less conflicted in their decisions but they might also have a lack of firm-specific know-how. In effect, this could lead to weaker bargaining power of directors in relation to executives when they have to contract for new employment agreements with their executives. Moreover, shareholders often do not have the time or ability to process complex disclosure about executive compensation. This will lead to uninformed voting behavior of rationally apathetic shareholders. Additionally, some shareholders, e.g., institutional investors, may prefer to stay on good terms with the CEO or directors because they want to have a good longterm relationship with the board and the executives. This article advises against implementing a specific salary cap for so called “very high compensation” and also advises against the implementation of tax burdens for executive compensation.
