Monday, 18 November 2013

Swiss to take on excessive executive pay at polls, again

From Expatica

In comparison to the UK, Switzerland is terrifyingly democratic, you cannot move for gigantic political posters, broadly all of which demand that the Federal Government does not interfere with the business of the various Cantons, adorning bus shelters and railway platforms. Getting a referendum requires only 100,000 signatures, something a few people might not mind having in good old Blighty.

So on 24 November  a radical proposal, dubbed 1:12 after the ratio it seeks to set between the highest and lowest salaries in a company, will be put up for a referendum. It was originally put forth two years ago, and received more than the 100,000 signatures needed to put any issue to a popular vote as part of the aforementioned ferocious direct democratic system. Unsurprisingly the initiative has also received widespread support from Swiss unions.

Although the Confederation Helvetica has largely dodged the implosion of various EU economies (just don't mention the UBS!) public anger has risen over what is considered abusive levels of pay and bonuses for top bosses.

Last March, nearly 70 percent of voters came out in support of a new law flat-out banning golden parachutes and excessive executive bonuses.

That vote came amid national outrage over a 72-million-Swiss-franc ($79-million, 58-million-euro) golden parachute deal for Daniel Vasella when he stepped down as chairman of pharmaceutical giant Novartis in February.

While top executives in the country on average made just six times the salaries of their lowest-paid employees in 1984, the gap swelled to 13 times more by 1998 and 43 times more in 2011, according to the Swiss transport union.

At food giant Nestle, for instance the top executive was reportedly making 73 times the salary of the person on the bottom rung two years ago, while the lowest-paid employee at Novartis in 2011 would have to work 266 years to make the highest earner's annual salary.

Last month polls were suggesting the vote on 1:12 rule could be close, but in recent days the no campaign – backed by the government and parliament – appears to have turned the tide. A survey for Swiss television released on Wednesday pointed to a 54% to 36% defeat for the proposal, with 10% so far undecided.


Lola said...

In re Nestle. Assuming bod at the bottom was in the UK and on Min Wage he'd get about £12K. Times that by 73 and you get £876,000. Is that enough to get someone to stand up and be counted to try and manage a comonay like Netsle and take all the crap?

I am not sure it is. Would YOU do it for that?

Bayard said...

Well, no, I wouldn't, but only because I wouldn't do it for any amount of money. OTOH if you're the sort of person who relishes dealing with "all the crap", you probably would if you thought that was the "going rate" and you couldn't do better elsewhere.

Anonymous said...

Would be better to run it by committee, then say a dozen people could share responsibility for around 70K a piece with the committee standing for re election by the workforce annually. The 'crap' would be shared out and anyone wanting to get a share could be nominated for election and campaign for selection by their peers.

SumoKing said...

I think that one of the main drivers behind this is UBS. UBS declared it did not want any small swiss bank account holders and it was going to get rid of them all..... and then it needed a big Federal bailout (which the Swiss gov did alright out of!). Now it comes out that UBS is making a 2.5 bn loss and also paid out 2.5 bn in bonuses.

So the general populace is a bit grumpy and the anti corporate bods have pounced on this, merrily flagging that big boss UBS gets about 1800 times the lowest paid in UBS.

Generally because of high wages in Switzerland there isn't a huge gap between wages. I think 1:12 is targeted to still leave execs pulling in about a million.