• 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)

Don't miss...X
Left Right

Your comments about this article

2013-03-01 17:10:12 by islandman
Ahhh! The sweet smell of Fascism!
Today's headlines
Burkhalter hails Swiss troops in Second World War
Swiss President Didier Burkhalter. Photo: FDFA

Burkhalter hails Swiss troops in Second World War

Swiss President Didier Burkhalter on Monday thanked the country’s citizens who mobilized 75 years earlier to defend the mountain country when the Second World War broke out. READ  

Swiss pays UK and Austria over tax dodging
Photo: Fabrice Coffrini/AFP

Swiss pays UK and Austria over tax dodging

Switzerland said on Monday that it had completed a programme to pay Britain and Austria hundreds of millions of euros in settlements for past tax-dodging by their citizens. READ  

Japan Novartis unit failed to report 'drug deaths'
Photo: Sebastien Bozon/AFP

Japan Novartis unit failed to report 'drug deaths'

The Japanese unit of Swiss pharma giant Novartis has admitted it did not report more than 2,500 cases of serious side effects in patients using its leukaemia and other cancer drugs, reportedly including some fatalities. READ  

Swiss health insurance premiums 'set to jump'
Federal Health Minister Alain Berset: set to release official figures later this month. Photo: Federal Assembly

Swiss health insurance premiums 'set to jump'

Swiss health insurance premiums are set to rise steeply overall next year, according to figures revealed by a Sunday newspaper. READ  

Presented by St Bernard Assure Limited
Car insurance made easy online with St Bernard
Photo: St Bernard Assure Limited

Car insurance made easy online with St Bernard

A new car insurance firm has ripped up the rule book when it comes to selling policies in Switzerland, by cutting out the middle-man and passing the savings onto their customers with its online only model. The Local finds out more. READ  

Bencic and Federer give Swiss double boost
Switzerland's Bencic celebrates at US Open. Photo: Mike Stobe/Getty Images North America/AFP

Bencic and Federer give Swiss double boost

Seventeen-year-old Belinda Bencic on Sunday became the youngest women's quarterfinalist at the US Open since 1997, giving Switzerland a double boost after Roger Federer moved into the last 16. READ  

Air show draws large crowds to Payerne
Patrouille Suisse in action. Photo: Matthias Kabel

Air show draws large crowds to Payerne

An estimated 160,000 people turned out for the opening weekend of Switzerland’s biggest air show at the Payerne military aerodrome in the canton of Vaud. READ  

Bolivian bus crash claims three Swiss lives
Route in the Uyuni region of Bolivia. Photo: Hermes Images/AFP

Bolivian bus crash claims three Swiss lives

A bus accident in Bolivia over the weekend claimed the lives of three Swiss citizens and at least six other people, according to press reports. READ  

Novartis heart drug billed 'blockbuster' after tests
Photo: Sebastien Bozon/AFP

Novartis heart drug billed 'blockbuster' after tests

An experimental drug from Swiss pharma giant Novartis reduced deaths from chronic heart failure by 20 percent compared with an existing treatment, according to the results of a vast new study. READ  

Kavcics's injury gives  Wawrinka US Open break
Wawrinka eases into fourth round. Photo: Don Emmert/AFP

Kavcics's injury gives Wawrinka US Open break

Switzerland's Stan Wawrinka reached the fourth round of the US Open tennis tournament by walkover on Saturday when Slovenian Blaz Kavcic withdrew from their third-round match with a right foot injury. READ  

RECEIVE OUR NEWSLETTER AND ALERTS
Sponsored Article
Car insurance made easy online with St Bernard
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
Travel
Switzerland remains world champion for per capita train travel
Culture
Social media backlash forces Polanski to bow out of Locarno film festival
National
Two policemen identified among three Israelis killed in train crash
Features
Untouched Alps: The Local explores Switzerland's only national park
National
Swiss government secretary tweets nude ‘selfies’ taken at work
International
Swiss couples fined in Ibiza for making love in van without seatbelts
National
Schumacher medical record theft suspect hangs himself in Zurich cell
National
Thousands of motorists drive without permits in Switzerland: report
National
Switzerland celebrates the centennial of national park in Graubünden
National
Animal rights group protests over dead fish throwing at festival
National
Federer forced to tear down kids' play area at Graubünden holiday home
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

1,983
jobs available