As Inequality Grows, Swiss To Vote On Curbing Executive Pay
Originally published on Fri November 22, 2013 10:12 am
Switzerland may be known for watches, wealth and secretive bank accounts, but increasingly people believe that not everyone is reaping their share of the country's economic well-being.
So on Sunday, the Swiss will vote on a referendum that would limit a CEO's pay to 12 times that of the company's lowest-paid worker.
The youth wing of the Social Democratic Party collected the 100,000 signatures necessary to turn the measure, known as the 1:12 initiative, into a national referendum.
David Roth, head of the party's youth wing, says that 25 years ago Swiss CEOs made six times more than the average worker; today, they earn more than 40 times as much. Roth says in a country of 8 million, 400,000 workers don't make enough to live on.
"I think we have to change something, because otherwise we'll go in a direction like the USA did in the last decade where people get homeless, for example, and other people had millions of dollars," he says. "It's a big problem if you have such inequality in a rich country."
To become law, the initiative needs to win a majority in the country's 26 cantons and among the total population.
"There is indeed a growing movement to at least rein in to some degree — there is a growing disgust, I think, with some of the excesses of corporate executive pay," says Jordan Davis, a reporter for Swiss public radio.
He says the opposition has been pouring money into a counter-campaign in the waning days.
"A lot of the posters you're seeing these days are from the business lobby, where they have these slogans saying it's a fake good idea, saying ... it sounds like a good idea to limit corporate salaries but indeed it's going to be actually terrible for the economy, it's going to force companies to leave and move to other countries," Davis says. "And so they're using, critics have said, scare tactics to get people to reject it."
Mood Across Europe
Anger at high corporate executive pay is flaring up elsewhere in Europe, including Spain.
In France, President Francois Hollande, on the campaign trail last year, promised to bring down the salaries of CEOs heading companies where the French state has a majority stake.
Effective last month, CEOs of French state firms cannot make more than 20 times what the lowest-paid employee earns. Their salaries are capped at around $600,000.
The opposition leader in France, Jean Francois Cope, scoffed at the measure, calling it ostentatious morality.
"How is lowering the salary of the head of the railroad going to change anything?" he said. "If you really want justice, then the average French worker should be earning more."
The latest polls show the Swiss salary measure has only about 36 percent support ahead of Sunday's vote, but proponents say don't count it out.
In March, Switzerland approved a referendum giving company shareholders a direct say in executive pay. That passed amid public anger over a proposed $78 million payout to a former executive of Swiss drug company Novartis.