A total 67.9 percent of Swiss voters cast their ballots on Sunday in favour of the package of measures, according to final poll results. The federal chancellery, which announced the outcome, said all of Switzerland's 26 cantons had passed the initiative — a rare occurrence.
"The people have decided to send a strong signal to boards, the Federal Council (Swiss government) and the parliament," the initiative's sponsor, businessman and senator Thomas Minder told public broadcaster RTS.
The draft law set down by his initiative — one of several initiatives being voted on at both national and local levels — only covers Swiss companies listed on Swiss or foreign stock exchanges.
It limits the mandate of board members to one year, and would ban certain kinds of compensation, including the so-called golden handshakes or golden parachutes given to executives when they leave a company.
In addition, it bans the bonuses received for takeovers, or when a company sells off part of its business.
While Switzerland has avoided the level of economic crisis seen in the European Union, which surrounds the Alpine nation, public anger has risen there as elsewhere over what is deemed abusive levels of pay and bonuses for top bosses.
Among those in the spotlight have been Daniel Vasella, former head of pharmaceuticals giant Novartis, who made 15 million Swiss francs (€12 million, $16 million) in 2011.
Adding fuel to the fire was Vasella's planned 72 million Swiss franc golden parachute, to be paid out over six years, provided he did not go to work for the competition, after stepping down this February.
The deal sparked uproar when details were leaked recently, and despite Novartis's subsequent announcement that Vasella, at the helm since 1996, would forgo the sum, he remained the unwilling poster boy for the referendum campaigners.
Sums made by counterparts from other companies were been spotlighted, including the 12.5 million Swiss francs for Severin Schwan, boss of pharmaceutical powerhouse Roche, the 11.2 million of food giant Nestle's Paul Bulcke, and the 10 million of Ernst Tanner, leader of chocolate group Lindt.
For Minder, who runs family teeth- and hair-care business Trybol SA, the massive sums on the table show that company boards have lost control of pay.
Minder told the Swiss daily Le Temps that instead of building up reserves and paying out five-percent dividends, boards have prioritised "astronomical" executive pay.
To halt that, he argues that the only solution is to give shareholders the power to set pay. The initiative states that all compensation packages to board members and the company leadership need to be approved by the general assembly.
Anyone within the listed companies affected who does not follow the rules could face up to three years behind bars and fines amounting to up to six years of their salary, according to the text.
The Swiss government and the Council of States parliamentary chamber came out against the initiative, cautioning that some large companies might decide to move their headquarters out of the country.
Minder rejected that argument on Sunday, telling RTS he expected his initiative to become Switzerland's "best export product".
"It is a great advantage for investors," he said, suggesting that instead of chasing companies away, such a law would entice investors to set up companies in Switzerland.
He also said he hopes other countries will feel inspired by the initiative.
The Swiss are "not alone in this domain" of frustration over excessive executive pay, he said.
In a bid to derail the Minder text, the parliament made a counter-initiative that was seen as less far-reaching, simply setting a requirement for shareholders to be consulted over pay and providing exceptions to the ban on golden parachutes.
The government will now draw up a proposed law to be reviewed by parliament, before it can be passed into law — something that usually takes more than a year.
However, if the new proposed law fails to win a parliamentary majority, the counter-proposal would become law directly.