Union raps Swiss executive pay rises

Top managers at large Swiss companies saw major pay rises in the past several years and continue to be overpaid relative to average workers, a union group charges.

Union raps Swiss executive pay rises
Photo: AFP

Remuneration for executives rose an average of 18 percent between 2011 and 2014 at three-quarters of major companies, Travail.Suisse said on Monday when it released its 11th annual report on management pay.

The hike in wages for those at the top came in spite of the Minder initiative, approved by voters in 2013, that was designed to curb excessive executive pay.

“The massive approval of the Minder initiative has not prevented the increase in salaries for top managers,” Jacques-André Maire, vice-president of Travail.Suisse told a press conference in Bern.

While some salaries have been reduced, pay levels generally continue at an extremely high level compared to what the lowest paid earn, the organization said.

The ten highest paid executives earned more than five million francs last year

The greatest pay gap last year was at Roche, the pharmaceutical giant, where outgoing chairman Franz Humer earned 15.38 million francs, 253 times as much as the lowest paid worker (61,000 francs a year) at the Basel-based company.

Roche’s CEO Severin Schwan earned 230 times as much as employees at the bottom, according to the Travail.Suisse figures.

Other executives with a pay ratio fo more than 200 to one included UBS CEO Sergio Ermotti (223 to one), Nestlé CEO Paul Bulcke (218 to one) and Novartis CEO Joseph Jiminez (208 to one).

Travail Suisse listed 37 executives with pay ratios of more than 100 to one, with 11 of them working at UBS, Switzerland’s largest bank, and another 11 at Credit Suisse, the second biggest bank.

Top managers from such companies as ABB, Swatch, Lindt & Sprüngli and Zurich Insurance also figured in the list.

Contacted by news agency ATS, the Swiss Employers Association declined to comment on the figures released by Travail.Suisse.

The association, instead, referred to official statistics that show the differences between the highest and lowest salaries have moderated in Switzerland compared to other countries.

Travail.Suisse’s report analyzed salaries at 27 large Swiss companies from publicly available data.

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UBS shareholders approve executive pay

Despite sharp criticism from a handful of UBS shareholders, a strong majority approved pay and bonuses for the executive of Switzerland’s largest bank at the company’s annual meeting in Zurich on Thursday.

UBS shareholders approve executive pay
The annual meeting of Switzerland's largest bank was held at Zurich's Hallenstadion. Photo: UBS

Dissident shareholders, including the activist group Actares, slammed the pay handed out to executives in 2012— a total of 70.4 million francs, slightly above the sum from the previous year — despite the bank’s net loss of 2.5 billion francs for the year.

In 2011, the bank earned a profit of 4.1 billion francs.

But in a non-binding vote at Zurich’s Hallenstadion, 82.54 percent of shareholders approved a report on remuneration for the top brass of Switzerland’s biggest bank.

At the 2012 annual meeting, 40 percent of UBS shareholders voted against the executive pay plan.

UBS Chairman Axel Weber told the meeting that the bank had made changes to its compensation model to reward performance and to cap bonuses.

“We are not likely ever to come up with a perfect solution that all stakeholders will always perceive as the right one,” Weber told shareholders.

“But I am confident that we are striking the right balance between meeting the interests of our employees and ensuring a proper return for our shareholders.”

Weber said last year marked an effort to systematically resolve “issues of the past”, including dealing with the Libor rate-fixing scandal, which cost the bank 1.4 billion francs in penalties.

He acknowledged that this had overshadowed progress made by the bank in implementing its new strategy and positive results posted by many of UBS’s business divisions.

“We deeply regret the fact that certain people within UBS were involved in manipulating Libor rates,” Weber said.

“Such misconduct is totally unacceptable,” he said.

“It is also completely at odds with the values of UBS or with the high ethical standards that we require each individual employee to observe.”