• Switzerland edition
 
Swiss poised to slash 'abusive' pay for execs
Thomas Minder, the man behind the initiative to cut 'abusive pay'. Photo: Trybol

Swiss poised to slash 'abusive' pay for execs

Published: 01 Mar 2013 08:51 GMT+01:00
Updated: 01 Mar 2013 08:51 GMT+01:00

A popular initiative against “abusive” compensation for the top brass of Swiss companies has caught the imagination of the country’s population — and international attention.

On Sunday, the results will be made public on a national vote on the proposal launched by Thomas Minder, a Schaffhausen businessman and independent member of the Swiss senate.

The initiative would require Swiss companies to give shareholders an annual binding vote on the total compensation of boards of directors and senior management.

Compensation paid in advance to executives would be banned, along with golden parachutes to departing bosses.

“This is not a Swiss issue,” Minder told The Local in an earlier interview.

“All over the world there’s the same discussion.”

Minder, who heads a small company called Trybol that sells "natural cosmetics," maintains the current pay system is rotten because it rewards a select group of individuals regardless of the performance of the companies they lead.

Recent polls have shown a clear majority of citizens support Minder’s initiative over a counter-proposal from the federal government.

The government advocates shareholder votes over executive pay, but they would be non-binding.

The cabinet, and Economiesuisse a lobby group for big business, believes Minder’s bid to cut “fat cat” pay risks harming Switzerland’s appeal internationally as a place to do business.

But a national outcry over a planned payment of 72 million francs to Daniel Vasella, recently departed chairman of drug giant Novartis, undermined the government’s position.

Faced with criticism from politicians and businessmen alike, Vasella ultimately decided to decline the “non-compete” payment meant to ensure that he would not work for a rival company.

But the episode served as a public reminder of the gap between what top executives and average citizens are earning.

Even though Switzerland’s per capita income is one of the highest in the world, Swiss citizens have a broadly egalitarian view.

Earning money from hard work is admired but windfall gains and flaunting of wealth is generally frowned upon in a country where modesty and discretion are hallmarks of the national character.

And public disgust has grown over massive pay packets paid to top executives in the country, many of them non-Swiss.

As a small shareholder in UBS, Minder is famous for railing against the “Americanization” of Switzerland’s largest bank.

At a 2008 shareholders meeting he assailed the bank’s then chairman Marcel Ospel.

Minder was critical of Ospel for receiving multi-million-franc compensation even while leaving a legacy of massive losses that eventually forced UBS to seek a government bailout to avoid collapse.

Security guards escorted him out of the meeting.

Since then, Minder has been planning his initiative, battling the mainstream business community along the way.

Meinrad Vetter, of Economiesuisse, told The Local in a past interview that while there are isolated excesses, the pay ratio between executives and employees is smaller in Switzerland than in other countries.

He acknowledged that pay for senior managers has risen in the past few years but he blamed that on the “internationalization of management”.

Higher salaries in Anglo-Saxon countries put pressure on compensation in other parts of the world, Vetter argued.

So if the Minder initiative passes, what will be the outcome?

Opinion is divided.

Peter Brabeck-Letmathe, the Austrian chairman of Swiss-based Nestlé, warns that no company in its right mind would set up headquarters in Switzerland under the Minder rules.

Without reason, Switzerland would be giving up “one of the world’s best company laws”, Brabeck-Letmathe said in an op-ed for the Neue Zürcher Zeitung.

Others say despite the international headlines a yes vote will bring, the actual repercussions will be fairly modest.

Only Swiss-listed companies would be affected and there would be no actual cap on executive salaries, Guy de Brabois, country manager of recruitment firm Robert Walters in Zurich earlier told The Local.

Malcolm Curtis (news@thelocal.ch)

Your comments about this article

2013-03-01 17:10:12 by islandman
Ahhh! The sweet smell of Fascism!
Today's headlines
WHO slammed for 'slow' response to Ebola virus
Hospital doctor in Philippines checks an isolation room for Ebola patients. Photo: Ted Aljibe/AFP

WHO slammed for 'slow' response to Ebola virus

The Geneva-based World Health Organization insisted on Tuesday it would probe complaints that it had been slow to wake up to the scale of Ebola, but insisted the focus now must be on battling the epidemic. READ  

Majority back new immigration curbs: poll
Detail of poster for Ecopop proposal. Photo: ecopop.ch

Majority back new immigration curbs: poll

A majority of Swiss citizens support a proposal to limit annual net immigration to 0.2 percent of Switzerland’s population, a new survey indicates. READ  

Eritrean refugees find shelter at Swiss abbey
Eritrean refugees in front of Einsiedeln abbey. Photo: Fabrice Coffrini/AFP

Eritrean refugees find shelter at Swiss abbey

After a harrowing flight from autocratic Eritrea, the last place Nuguse Teklestion expected to call home was the pastoral grounds of a Swiss monastery housing a mysterious black Madonna. READ  

Celebrated Swiss portrait photographer dies
Burri at the Elysée museum last year. Photo: Elyséee Museum

Celebrated Swiss portrait photographer dies

Swiss photographer René Burri, celebrated for his portraits of Che Guevara and Pablo Picasso, died Monday in Zurich aged 81, the Magnum agency said. READ  

'Monstrous' child molester jailed 15 years
Photo: Canton of Ticino

'Monstrous' child molester jailed 15 years

A 35-year-old man who sexually abused five girls of primary school age a total of more than 900 times was sentenced to a 15-year prison term by a court in the canton of Ticino on Monday. READ  

Fourteen-year-old Swiss whiz kid enrols at uni
Bastian Eichenberger: speaks nine languages. Photo: Sandra Meyndt/University of Freiburg

Fourteen-year-old Swiss whiz kid enrols at uni

A Swiss teenager has become the youngest university student in Germany, according to media reports in Switzerland. READ  

Electrolux to close Swiss manufacturing plant
Photo: AFP

Electrolux to close Swiss manufacturing plant

Swedish home appliances maker Electrolux plans to close its production plant in Schwanden in the canton of Glarus, eliminating 120 full-time jobs, partly because of tighter rules about Swiss-made products. READ  

Three kids hospitalized in crossing car crash
Photo: Zurich cantonal police

Three kids hospitalized in crossing car crash

Three children are in hospital, including a six-month-old infant, after a car collided with a family walking across a pedestrian crossing in Oberglatt, a municipality near the Zurich airport, police said on Monday. READ  

Quarter of workers 'stressed out': survey
Photo: AFP

Quarter of workers 'stressed out': survey

More than 40 percent of employed people in Switzerland believe they suffer from overwork, while a quarter of them say they are stressed out, according to a new survey. READ  

Canadian Ebola vaccine headed for Geneva
Geneva's university hospital. Photo: Julien Gregario

Canadian Ebola vaccine headed for Geneva

Canada will start sending more than 1,000 doses of an experimental Ebola vaccine to Switzerland this week as part of the global fight against the deadly virus, a Geneva hospital says. READ  

RECEIVE OUR NEWSLETTER AND ALERTS
National
Expat American professor disputes 'unjust' Swiss citizenship rejection
Features
Swiss-based English expat writer lauds immigrant 'brains and brawn'
International
Our survey: Switzerland third priciest for food and drink from back home
National
Zurich market gardener sets world 'record' for heaviest pumpkin
National
Report: Switzerland's residents richer than before economic crash
Features
Geneva lab sleuths use high tech to help art world uncover fakes
National
Father of Scot missing since early September fears Swiss trauma
National
Foreign women give birth to rising share of newborns: latest figures
National
'Giant's penis' bloom in Basel uni botanical garden bigger than ever
National
Switzerland's voters reject public health insurance proposal
National
Zooming foreign immigration continues to boost Swiss population
National
Scientific study rings alarm over wellbeing of Swiss cows with bells
National
Geneva MP seeks ban on charging for tap water in restaurants
Business & Money
Switzerland's residents top world financial wealth list: Allianz report
National
Saint Maurice abbey in Valais celebrates 1,500 years of history
National
Streaming movie video service Netflix arrives in Switzerland
National
Professional Chilean base jumper dives to death in Swiss Alps
Education
ETH Zurich remains top university in Europe: QS world rankings
National
Switzerland's housing vacancy rate jumps: new federal figures
National
Swiss football club fires team masseuse over explicit sex video
National
Geneva police arrest easyJet passenger over hand luggage row
Business & Money
Latest forecasts for Swiss economic growth turn less bullish
Sport
Formula One legend Schumacher to continue treatment at Swiss home
National
Former federal planning official calls for nine Swiss cantons
Features
The Local gets the lowdown on mushroom picking in Switzerland
National
Virgin boss Richard Branson's son rescued from peak of Matterhorn
National
Swiss President Didier Burkhalter's commute turns Twitter sensation
Features
High-tech cameras give dizzy view of Eiger's north face (VIDEO)
Politics
Baden municipal council strips 'nude selfies mayor' of duties
Business & Money
Switzerland stays atop competitiveness table for sixth year
National
Federal parliament secretary agrees to step down over nude selfies
National
Swiss residents pick Swedes as ideal European soul mates: survey
National
Zurich officials call project to move prostitutes to 'sex boxes' a success
National
Swiss gays recognized as parents of child born to surrogate mother
Health
Increase in mountain bike accidents keeps Swiss hospitals busy
National
Swiss policeman belatedly honoured for saving Jews from Holocaust
National
'Suicide tourists' to Switzerland double in three years: study
National
Swiss Post SMS scheme gets stamp of approval after pilot project
Business & Money
American tax evasion crackdown hits Swiss private banks' bottom line
Politics
Woman accuses Swiss politician in nude selfies scandal of lying
National
Villagers in Graubünden valley reject hydro plant to protect vultures
Business & Money
Court rules against appellation for absinthe from Neuchâtel valley
National
Two hundred passengers rescued after landslide derails Swiss train
Latest news from The Local in Austria

More news from Austria at thelocal.at

Latest news from The Local in Germany

More news from Germany at thelocal.de

Latest news from The Local in Denmark

More news from Denmark at thelocal.dk

Latest news from The Local in Spain

More news from Spain at thelocal.es

Latest news from The Local in France

More news from France at thelocal.fr

Latest news from The Local in Italy

More news from Italy at thelocal.it

Latest news from The Local in Norway

More news from Norway at thelocal.no

Latest news from The Local in Sweden

More news from Sweden at thelocal.se

2,261
jobs available