• Switzerland's news in English
 

Swiss poised to slash 'abusive' pay for execs

Malcolm Curtis · 1 Mar 2013, 08:51

Published: 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
Migrant crisis
Swiss join bid to combat refugee smuggling
Forensic officers work at a truck found to contain dead migrants on a motorway in Austria on Thursday. Photo: Dieter Nagl/AFP

Swiss join bid to combat refugee smuggling

21 hours ago

Switzerland, Germany and Italy are preparing to launch a joint task force to detect and dismantle networks smuggling refugees and migrants into Europe, Swiss authorities said on Friday.

Nestlé accused in US of 'slave labour' cat food
Nestlé headquarters in Vevey in the canton of Vaud. Photo: Nestlé

Nestlé accused in US of 'slave labour' cat food

21 hours ago

UPDATED: Swiss-based food giant Nestlé on Friday rejected allegations that it had knowingly allowed its Fancy Feast cat food to contain fish from a Thai supplier suspected of using slave labour.

Swiss economy shows surprising growth in Q2
The Swiss economy continues to show resilience. Photo: Mike Chapman

Swiss economy shows surprising growth in Q2

1 day ago

Domestic spending kept Switzerland’s economy expanding in the second quarter as government figures released on Friday showed a surprise upturn in growth.

Italian base jumper dies in Bernese Oberland
Base jumpers in Lauterbrunnen in the canton of Bern. Photo: AFP

Italian base jumper dies in Bernese Oberland

1 day ago

A 46-year-old Italian plunged to his death in the Bernese Alps Thursday after crashing onto rocks during a base jump, the latest in a series of such accidents in Switzerland in the past year, police said.

Manhunt launched after Geneva hotel holdup
Photo: Geneva cantonal police

Manhunt launched after Geneva hotel holdup

1 day ago

Geneva cantonal police launched a hunt for a man suspected of holding up a luxury hotel overlooking Lake Geneva on Thursday, two days after another armed robbery in the city.

US penalizes UBS for dealing with 'terrorist'
Photo: UBS

US penalizes UBS for dealing with 'terrorist'

1 day ago

UBS, Switzerland's largest bank, has agreed to pay American authorities $1.7 million to settle "apparent" violations of rules banning transactions benefiting officially designated terrorists, the US Treasury Department said on Thursday.

Wawrinka could face Murray in US Open
Switzerland's Wawrinka at last year's US Open. Photo: Getty Images North America/AFP

Wawrinka could face Murray in US Open

1 day ago

World number one Novak Djokovic could meet eighth-seed Rafael Nadal in the US Open quarterfinals while Andy Murray and Stan Wawrinka could meet in another quarterfinal under the US Open draw announced on Thursday.

Report confirms rising number of immigrants
Citizens gather in Appenzell Innerrhoden for an annual Landsgemeinde (assembly of the people). Photo: AFP/File

Report confirms rising number of immigrants

1 day ago

Immigration is continuing to drive Switzerland’s growth in population, which rose by almost 100,000 to more than 8.2 million by the end of 2014, official government figures confirm.

Bern window smashing stunt promotes safety
Car is lowered into pool of water for window smashing demonstration. Photo: BFU

Bern window smashing stunt promotes safety

2 days ago

Visitors to Bern were treated on Wednesday to the unusual sight of a man smashing his way out of a car submerged in a pool of water in front of the federal parliament.

Federer to defend Brisbane title in 2016
Photo: AFP/File

Federer to defend Brisbane title in 2016

2 days ago

Switzerland's 17-time Grand Slam champion Roger Federer and five-time major-winner Maria Sharapova will defend their Brisbane International titles in the lead-up to the Australian Open in January, organizers said on Thursday.

RECEIVE OUR NEWSLETTER AND ALERTS

National
Switzerland set to test world's longest train tunnel under the Alps
National
US right-wing think tank: Swiss are freest people in Europe
National
Bottoms up: new signs alert visitors to Zurich's nudist bathing zones
Sport
Swiss man smashes cliff jumping record with 59-metre dive
National
Climate change seen as plus for Switzerland's wine growers
Photo: Federal Housing Office
National
Buying home in Switzerland is 'cheaper than renting'
National
Central bank to launch new high-tech banknotes — six years late
National
Swiss speed climber summits all 4,000m peaks in the Alps
National
Report: Switzerland is world's safest country (barring extreme sports)
National
Where are the top ten spots to visit in Switzerland for tourists?
National
Two Japanese climbers found dead after scaling Matterhorn's summit
National
High Geneva accommodation costs force unpaid UN intern to live in tent
National
Zurich farmer ordered to remove cow bells after noise complaints
National
Gays file criminal complaint against Swiss bishop over speech
National
The Expat Guide: Moving to Switzerland
National
Briton who ends life in Switzerland: 'Ideal shelf life for people is 70'
National
Aargau farmer under fire after pigs gassed to death by own excrement
National
Cows trample German woman to death in Graubünden Alps
National
Hot times: Swiss city to host first naked performance festival
Features
Expat American author's time in Zurich inspires racy bestseller
National
10 amazing places to be on Swiss National Day — or any other day
National
Swiss army pilfers water from French lake for cows in Switzerland
National
Swiss Army airlifts water to thirsty cows facing drought conditions
International
Canary Islands: diver killed in collision with Swiss windsurfer
National
VIDEO: Seagull steals camera for amazing bird's eye selfie
Switzerland celebrates first ascent of Matterhorn
Politics
Immigrant recruits may not be loyal: Swiss defence minister
Solar Impulse 2 round-the-world flight halted for repairs
Society
Teenager gets high on vegetarian meal at Zurich club
National
Greece seeks tax revenues from assets 'hidden' in Swiss banks
Culture
Paris police arrest Swiss artist for naked Eiffel Tower selfies
National
Scientists uncover largest Swiss dinosaur skeleton ever found
National
National weather office extends danger alerts as heatwave takes hold
National
Most severe heatwave in Switzerland since 2003 on the way
Travel
Bogglingly expensive Geneva club sandwiches remain 'priciest in world'
Politics
Anti-immigration nationalist party remains most popular: poll
National
Greek finance minister slams Swiss over lack of tax evasion info
Business & Money
Insects proposed for sale in Swiss supermarkets next year
National
'Oh God — I'm coming': noisy lovers' complaint goes public
National
Canton of Ticino threatens closing Italy border to asylum seekers
National
Just in case: Swiss National Bank prepares for Grexit 'crisis'
National
Russian crisis fuelled by sanctions threaten 40,000 Swiss jobs: study
National
Art Basel: Art for art's sake — or to make an investment?
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

4,404
jobs available