The article reviews the 2025 AGM season of Swiss companies listed on SIX Swiss Exchange focusing on three main topics: (i) virtual annual general meetings, (ii) non-financial reporting, and (iii) compensation. While companies conducting virtual annual general meetings are still in a clear minority, an increasing number are opting for virtual shareholder meetings. The article also discusses the second AGM season of non-financial reporting, noting the ongoing debates in this area. Additionally, it addresses the increase in executive compensation in Switzerland, which remains the highest in Europe, and the contrasting views between local individual shareholders and international institutional investors on compensation-related topics.
1) Virtual AGM
With the entry into force of the corporate law reform, Swiss companies have the possibility to allow for a virtual general meeting, i.e., a general meeting without a physical venue (cf. artice 701d(1) of the Swiss Code of Obligations). While a sizeable number of companies have introduced the possibility of holding virtual general meetings in their articles of association, only a few companies have actually held virtual general meetings so far. In this AGM season, Aevis, ASMALLWORLD, Galderma, Swatch, Orascom and Carlo Gavazzi held their annual general meetings virtually. Barry Callebaut, having its annual general meeting in December of each year, also held its annual general meeting virtually last December. The same applies to ON Holding, a Swiss company listed abroad on NASDAQ. DSM-Firmenich, listed on Euronext, held its annual general meeting in a hybrid form, both physically and virtually. Despite these examples, the vast majority of Swiss listed companies still prefer the traditional method of inviting shareholders to a physical meeting. Although we did not conduct empirical research, the reasons for physical meetings often include (i) the possibility of a formal and informal dialogue between company representatives and the shareholder constituency, (ii) a certain expectation, usually from smaller individual shareholders, to be invited to a physical meeting with a dinner or at least an aperitif, and (iii) a certain skepticism by proxy advisors towards virtual meetings.
The American proxy advisor Glass Lewis is open to virtual meetings, provided that clear procedures are in place to ensure that shareholders can effectively participate and communicate with the board of directors in a meaningful way. The other large American proxy advisor, ISS, is more stringent about virtual meetings and details several conditions for an affirmative recommendation: In addition to deciding on a case-by-case basis, it requires, among other things, that shareholders have the same rights as at an in-person meeting; assurance that it will be convened only in extraordinary circumstances; past use by the relevant company; and time restrictions (i.e., whether the authorization is limited in time or provides for an indefinite period of authorization). The Swiss proxy advisor, Ethos, seems to be even stricter though remains vague, stating that it will oppose amendments to the articles of association that include the possibility of virtual shareholder meetings without adequate justification. It does not outline what reasons it considers adequate. While we believe that Glass Lewis‘s condition requiring clear procedures for effective shareholder participation is meaningful (and also required), we have difficulties agreeing with the approaches of ISS and Ethos. It is unclear why ISS would like to see virtual meetings only in extraordinary circumstances and with limited authorization. Virtual meetings may also have the benefit of allowing more people to dial in more easily and avoid travel, which is arguably more eco-friendly. Ethos‘s approach primarily leaves companies with a question mark, given its unclear guidance.
Against this background, it is worth questioning whether a physical shareholder meeting is always preferable and represents better corporate governance than a virtual meeting. Firstly, this depends on the shareholder base. A company with a large shareholder base of individual shareholders in Switzerland, many of whom are former employees, might be better served with a physical meeting for live interaction between the company and its shareholders. However, many Swiss listed companies have institutional investors as their largest shareholder base, who typically vote in advance. It is therefore not surprising that the outcome of the voting is regularly already known ahead of the AGM, as the independent proxy often represents more than two-thirds of the votes at an AGM. For shareholders living outside of Switzerland, a virtual AGM may seem more shareholder-friendly as it allows easy access to the meeting without travel. The argument of proxy advisors that a virtual meeting is not shareholder-friendly because it does not allow the same level of interaction is questionable, particularly in today‘s world where communication technology is almost everywhere.
Critics may argue that shareholder presence at virtual shareholder meetings is often much lower than at physical shareholder meetings. Physical meetings offer the advantage of a lively interaction with shareholders, be it formally during the meeting or often also after the formal meeting during the lunch or aperitif that many companies offer. Shareholders physically present at AGMs of Swiss listed companies usually command only a very small portion of the total outstanding shares. Critics argue that absent any such lunch, aperitif or giveaway, shareholder attendance would be much lower. If such benefits are indeed the only or main reason to attend physically, it is more than questionable whether good corporate governance is fostered with physical meetings. In our view, companies should not shy away from virtual meetings just because a small but very vocal local shareholder constituency favors them. Instead, they should look at shareholder meetings from a holistic corporate governance and investor relations perspective and decide what tools of interaction work best in light of their shareholder base.
2) Non-Financial Reporting
The year 2025 marks the second AGM season following the implementation of mandatory obligations under non-financial reporting, as stipulated in article 964a of the Code of Obligations. Consequently, much of the initial uncertainty observed last year has subsided.
A prominent topic during last year’s voting season on non-financial reporting was whether the vote should be binding or consultative. Several larger corporations submitted their reports for consultative voting, despite vocal criticism from the Swiss proxy advisor Ethos, which argued against such a practice. However, these criticisms did not significantly alter many boards‘ decisions last year and also this year. In our opinion, the discussion surrounding binding versus consultative votes remains largely theoretical as a rejection of a non-financial report by shareholders does not have immediate consequences for the board (i.e., there is no requirement to revise the report and re-submit for approval). While not constituting an enforceable legal obligation, any board is well advised to review its strategy as to the matters included in the report and the manner of its reporting in case of a negative vote on the non-financial report, irrespective of whether the vote was binding or only consultative.
Despite a certain countermovement in the United States, this year’s AGM season showed that investors are still interested in the sustainability of the companies in which they are invested, and assign sustainability a strategic role. While Ethos was more critical of non-financial reports and recommended a vote against roughly a fifth of the reports, the American proxy advisors were more relaxed. Despite the criticism, the reports were often approved with a rather high acceptance rate of more than 90%.
Currently, the Code of Obligations does not mandate third-party review of these reports. Nonetheless, almost half of the listed companies have opted for limited assurance from their auditors. Interestingly, this figure remained largely stable between last year and this year’s AGM season. Companies with a more international shareholder base or orientation tend to seek limited assurance, given similar EU requirements, whereas smaller companies may often find it easier to forgo such reviews, although we found several smaller companies which have sought a limited assurance for their report. Additionally, as noted last year, a significant majority of companies continue to incorporate their non-financial reports into their annual reports.
Last year, the Federal Council proposed stricter regulations for non-financial reporting and initiated a consultation process. The aim was to align Swiss legislation with the EU framework while incorporating a “Swiss finish“ to simplify certain EU requirements. However, the proposal faced criticism from practitioners during the consultation period for being overly burdensome and bureaucratic. Further, many pointed out that the extension of the scope of application would impose an undue burden on smaller companies as they often lack the expertise and relevant human resources needed to produce such reports. Currently, this project is on hold due to the EU‘s omnibus package, which seeks to relax and postpone certain non-financial reporting rules.
3) Compensation
The median level of executive compensation in Switzerland has again increased during the last year and remains the highest in Europe (see HCM study “2025 SAY-on-Pay Outcomes & Trends in Board and Executive Compensation; hereafter the “2025 HCM Study”). It is therefore not surprising that compensation is usually the mostly hotly debated topic at AGMs of Swiss listed companies. However, the intensity of the debate, often triggered by local individual shareholders with a very limited holding of shares, has again contrasted with the outcome of compensation-related AGM votes, most often driven by international institutional investors. To our knowledge, no compensation related topic has been rejected by shareholders of a listed company in the 2025 AGM season. Also, approval rates have remained relatively high and even improved slightly according to the 2025 HCM study. This is in particular the case for the binding votes on the compensation budgets for the board of directors and the executive management.
Following the guidance of proxy advisors, shareholders are usually most critical through the consultative vote on the compensation report. The rationale seems to be that any potential rejection by shareholders of this agenda item has no legally enforceable consequences: the report does not have to be re-submitted to shareholders for approval, nor is there any impact on the compensation that has been paid or is planned to be paid. It is a “valve” for shareholders to voice satisfaction or dissatisfaction with compensation generally. Hence, 28% of the Swiss listed companies had approval rates for this agenda item below 80% (2025 HCM Study; same level as in the previous year). This percentage is usually considered as a threshold below which the affected companies, while strictly legally not obliged to do so, should address shareholders‘ compensation-related concerns in some way.
The reasons for shareholder dissent differ. According to the 2025 HCM Study, the most cited reasons were: Absolute level of compensation is perceived as too high; insufficient alignment between compensation and group performance; lack of transparency in compensation disclosures (criteria applied etc.); and general concerns with compensation structure and design. Companies that have received approval rates near or even below 80% are well advised to engage with their shareholders, identify their specific concerns and try to address them. In particular, it should be possible to address concerns around inadequate disclosure and insufficient alignment of pay to performance in time for the publication of the next compensation report.
4) Conclusion and Outlook
While the AGM 2025 did not reveal any groundbreaking changes, it highlighted certain trends. The rise in virtual AGMs, even if still small in number, is noteworthy, and it is conceivable that the number of virtual AGMs will continue to increase. Regarding non-financial reporting, we hope that companies may rely on a certain continuity, which will facilitate the reporting over time. Lastly, compensation will remain a hot topic and one to watch even though approval rates remain at a comfortable level overall. With compensation levels expected to further increase at executive level, compensation undoubtedly remain in the spotlight of shareholder attention – at least for those present at the AGM.
Annette Weber (annette.weber@advestra.ch)
Thomas Reutter (thomas.reutter@advestra.ch)