Business Irish

Sunday 22 April 2018

Energy giant relocates HQ to Ireland over Swiss pay rule fears

Weatherford and Pentair have told their shareholders of concerns that Swiss voters could force the introduction of new laws that could damage business
Weatherford and Pentair have told their shareholders of concerns that Swiss voters could force the introduction of new laws that could damage business
John Mulligan

John Mulligan

Fear that Swiss voters could use their unique electoral power to negatively impact business has prompted the $14bn (€10bn) global oil and gas services giant Weatherford International to shift its HQ to Ireland.

It joins other firms – such as global filtration firm Pentair, which has a $16bn (€11.5bn) market capitalisation – that are ditching Switzerland for Ireland.

Weatherford and Pentair have told their shareholders of concerns that Swiss voters could force the introduction of new laws that could damage business.

If Swiss citizens gather sufficient signatures to back a proposed change to the law, they can force the government to put those proposals to a referendum.

Last year, Swiss voters approved the so-called Minder Initiative that gives shareholders the right to an annual ballot on company managers' pay, as well as incentives for completing mergers and severance packages. Violations can result in a three-year prison sentence. The initiative had been proposed by Thomas Minder, the boss of a herbal toothpaste business.

But voters rejected a separate proposal that would have seen the salaries of top bosses capped at 12 times the amount of a company's lowest wage. But firms are concerned that other laws could be passed, hurting business.

In a circular to shareholders, Weatherford said that a successful business requires an environment in which it can manage its operations in a predictable manner.

"As such, we have closely monitored proposed and recently implemented changes to Swiss law that would limit Weatherford's ability as a multinational company to retain and attract key executive talent and directors," it said.

It said Switzerland's Minder Initiative will "make it extremely difficult to recruit the best that the industry has to offer". It added that moving its HQ to Ireland will mean it will be located in a "business-friendly base" and allow it to operate at the "lowest possible cost". As part of the move, it's delisting its shares from the SIX exchange in Switzerland and from the NYSE Euronext-Paris. It will retain its NYSE listing. Weatherford's operations are primarily based out of Texas.

It said Ireland is an "attractive proposition from an economic and business perspective". Shareholders will be asked to vote on the proposal in June.

Pentair also said it was moving to Ireland because the legal and business environment was "more predictable".

Irish Independent

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