Some 67.9 percent of voters backed the "Rip-Off Initiative," with 32.1 percent against, according to the official count broadcast by Swiss public television station SRF.
The outcome of the referendum was considered a foregone conclusion after opinion polls in recent months showed strong public support for the initiative.
News last month that the outgoing board chairman of Swiss drug maker Novartis AG, Daniel Vasella, was to receive a leaving package worth 72 million Swiss francs ($77 million) further fired up public sentiment against "fat cat" bosses. Vasella later said he would forego the deal, but by that time the incident had dashed opponents' hopes of stopping the initiative.
"Today's vote is the result of widespread unease among the population at the exorbitant remuneration of certain company bosses," Justice Minister Simonetta Sommaruga told a news conference in the capital Bern hours after polls closed.
Swiss lawmakers will now have to draft a law giving shareholders the right to hold a binding vote on all compensation for company executives and directors. The law will also ban "golden hellos" and "goodbyes" - one-off bonuses that senior managers sometimes receive when joining or leaving a company.
It also promotes greater corporate transparency, for example by requiring that all loans to executives be declared and forcing pension funds to tell their members how they voted at shareholder meetings.
The measure targets all Swiss-based companies as long as their shares are publicly traded. Breaching the rules could lead to a fine of up to six annual salaries and up to three years in prison.
"It's a powerful signal," said Thomas Minder, an independent lawmaker and businessman who was one of the main forces behind the Rip-Off Initiative.
Opponents conceded that their efforts to warn voters of the possible risks to the Swiss economy had failed.
"We will respect the will of the people," said Pascal Gentinetta, chairman of the powerful business lobby group economiesuisse.
But Christa Markwalder, a lawmaker with the pro-business Free Democratic Party, said foreign firms could now think twice about moving their headquarters to Switzerland. In recent years the country has attracted firms such as oil rig owner Transocean Ltd., fire and safety company Tyco International Ltd., and bakery conglomerate Aryzta AG thanks to its comparatively low taxes and light-touch regulation.
In Europe, some other countries such as the Netherlands and Denmark already have similar legislation allowing shareholders at least a binding vote on executive compensation. But in the U.S. and Britain such "say-on-pay" votes are non-binding.
The Swiss decision comes on the heels of a European Union decision this week to cap bankers' bonuses at one year's base salary except in the case of overwhelming shareholder approval.
The idea that shareholders should have a strong say in their company's affairs chimes with Switzerland's tradition of direct democracy. Voters in the country who collect 100,000 signatures can force a binding referendum on any issue.