By Erik Kirschbaum
BERLIN, March 4 (Reuters) - A Swiss decision to impose tough new controls on executive pay could encourage other European countries to follow suit, with political leaders in Germany and France voicing support for compensation rules modelled on those of their smaller neighbour.
"The Swiss often show the way and personally I think we should take inspiration," French Prime Minister Jean-Marc Ayrault said on Monday, a day after Swiss citizens voted in a referendum to give shareholders veto rights on pay and ban big rewards for incoming and outgoing managers.
Rainer Bruederle, parliamentary floor leader for Germany's ruling Free Democrats (FDP), also backed the Swiss move, saying politicians in Berlin should "set an example" and enact similar rules before a Sept. 22 federal election.
He was supported by Justice Minister Sabine Leutheusser-Schnarrenberger, who said she would examine whether and how shareholder rules could be improved.
Chancellor Angela Merkel's spokesman was more circumspect, saying her preference was for European Union-wide rules on executive pay.
"It's not right to go off nationally alone on something like this in an economy with international links but rather to pursue it in a larger European context," Steffen Seibert said.
The issue of executive pay has been a hot topic in Germany since the 2008-2009 financial crisis led to taxpayer bailouts of banks and governments. It could be a key issue in the looming election, where Merkel will be seeking a third term, and is fighting off accusations from the opposition Social Democrats (SPD) that she has been too lenient on bankers.
Merkel is a strong defender of the post-war "social market economy" model, which discourages a big gap between the wages of assembly line workers and executives in the boardroom. But income inequality has risen on her watch.
Joachim Poss, a deputy parliamentary floor leader for the SPD, backed the Swiss move and said rules in Germany must change.
"The current rules are not strong enough for the fight against the excessive executive pay," Poss told Reuters. "Experience has shown that voluntary measures don't work."
Swiss citizens voted on Sunday to impose some of the world's strictest controls on executive pay with an overwhelming 67.9 percent backing, forcing public companies to give shareholders a binding vote on compensation.
The measure received one of the highest approval rates ever for a popular initiative.
While anger at multi-million dollar payouts for executives has spread around the globe since the financial crisis, Swiss direct democracy - including four national referendums in a year - means public outrage can be translated into strong action.
Brussels agreed a cap on bankers' bonuses last week and countries including the United States and Germany have introduced advisory "say on pay" votes. Britain also wants to give shareholders a binding vote on pay and "exit payments" at least every three years, but the Swiss plans go further. (Additional reporting by Leigh Thomas in Paris; Editing by Noah Barkin and Peter Graff)
Swiss Curbs On Executive Pay Inspire German, French Leaders