March 4, 2013; Source: Bloomberg Businessweek
Swiss voters have overwhelmingly approved a plepiscite giving corporate shareholders a binding vote each year on executive pay. The measure takes immediate effect and the government is now at work on implementation procedures. Julius Baer Group Ltd. Chief Economist Janwillem Acket tells Businessweek, “It’s not so radical as you might think at first glance…It’s not against high wages, but against excesses, and it is part of a European trend.” Businessweek notes, “The initiative, which applies to Swiss firms listed domestically and abroad, also bans big payouts for new hires and for managers when they leave.” Last month, details of such a payout to Daniel Vasella, the outgoing chairman of Novartis, fueled public outrage. The company was to have paid him up to $78 million to keep him from working for a competitor.
There are, of course, the usual protestations from corporate interests. Some assert that it will hurt Switzerland’s competitive position but not every business leader feels that way. In fact, Thomas Minder, a Swiss businessman and senator, took this initiative up as a personal mission at a time when there were plenty of outrageous examples to work with. One situation that particularly got under his skin came about when Swissair’s last chief executive, Mario Corti, received five years’ salary before taking office but then only stayed a few months. Swissair’s financial problems had a major effect on Minder’s business, which provided the airline with toothpaste.
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Would that the citizens of this country could begin to see themselves as able to take such action. In the U.S., we seem to accept an ever more extreme economy as the wages of democracy when in fact it need not be. We were interested in this video from Mother Jones, which contrasts what people think those extremes look like against what they really are:
Watch it and weep. –Ruth McCambridge