Swiss voters have rejected a proposal to cap the salaries of top executives at 12 times that of a company's lowest wage, heeding warnings from industry leaders that the measure could harm the country's economy.

The country voted 66 percent against the so-called "1:12 initiative for fair pay" on Sunday that was brought forward by the youth wing of the socialists (JUSO). The idea behind the proposal was that nobody should earn more in a month than others earn in a year.

"Of course we are disappointed. But I also believe that we have an achievement nonetheless," JUSO President David Roth told Reuters news agency.

"A year ago, opponents were defending high salaries. Today's no-one doing that. No-one in Swiss politics would dare say that million salaries are justified."

Threat to economy

Opponents to the proposal had warned it would harm Switzerland by restricting the ability of firms to hire skilled staff, forcing firms to decamp abroad, resulting in a shortfall in social security contributions and higher taxes.

"It's an important decision for the Swiss business location," Valentin Vogt, president of the Swiss Association of Employers told Swiss television SRF.

"The Swiss people have clearly decided that it's not up to the state to have a say on pay."

The Swiss have a history of voting against proposals they feel could hurt the country's economic success story or threaten competitiveness.

Initiatives to increase workers' annual paid holiday allowance to six weeks from four and to cut the working week to 36 hours from 42 both have failed at the ballot box in the past.

Source: Al Jazeera and agencies