Sunday's vote is just one of several initiatives being put to Swiss voters to try to address the widening income gap in the country. Switzerland will also hold a vote on whether to introduce a basic living wage of $2,800 per month from the state, though a date has not yet been set.
While anger at multi-million payouts for executives is not limited to Switzerland, the Swiss system of direct democracy - which allows for up to four national referenda per year - means popular outrage can more easily be translated into action.
Deborah Warburton, a partner at executive search consultants Hedley May said the issue has resonated in other parts of Europe.
"Even though it was a 'no' vote, the question of how to make executive pay fairer is still very much a live issue," she said, adding Britain has implemented a law to give shareholders a binding vote on executive pay while France and Germany are weighing similar measures.
(Read more: Swiss govt urges voters to reject cap on executive pay)
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.
Yet anger over pay had tapped a nerve in Switzerland, a generally egalitarian country, where citizens have grown increasingly unhappy with rising wealth inequality as wages of executives balloon while those of low-skilled workers lag.
A referendum in March this year to give shareholders a binding say over executive pay and ban golden handshakes and parachutes was overwhelmingly backed by voters.
Some Swiss firms have acknowledged the public anger. Last month, Credit Suisse said it made a "mistake" by paying Chief Executive Brady Dougan 19.2 million francs ($21 million) in cash and stock in 2009, plus 70 million francs($76.75 million) worth of stock under a bonus plan for 2004. That meant his total pay was 1,182 times that of the bank's lowest paid employee, according to Travail.Suisse.