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A Daring Bid to Stomp Out CEO Pay Excess


World  (tags: 'CIVILLIBERTIES!', conflict, freedoms, government, interesting, media, salary limits, Sweden, society )

Kit
- 278 days ago - truth-out.org
Something astounding is happening in Switzerland. For the first time ever, voters in a modern developed nation are going to be voting on whether to create what essentially amounts to a "maximum wage."



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Kit B. (276)
Saturday November 23, 2013, 5:09 pm
So sorry I pulled the wrong map.




Something astounding is happening in Switzerland. For the first time ever, voters in a modern developed nation are going to be voting on whether to create what essentially amounts to a “maximum wage.”

The vote will come this Sunday, November 24, on a ballot initiative that bans any Swiss corporate executive compensation that runs over 12 times worker pay.

In effect, under this “1:12 Initiative for Fair Pay,” no Swiss company would be able to pay its top executives more in a month than the company’s lowest-paid workers make in a year.

Swiss corporations currently compensate their top execs more generously than any other nation in continental Europe. At pharmaceutical giant Roche, CEO pay runs 236 times the firm’s lowest wage. At Nestle, the divide spreads 188 times.

Gross margins like these four years ago caught the attention of activists in Juso, the youth wing of Switzerland’s Social Democratic Party. The activists sensed growing public outrage at a corporate pay system that has, as former Juso president Cédric Wermuth recently told Too Much, “greedy managers earning millions while other people earn too little for living.”

Juso decided to challenge corporate pay inequality head-on, through Switzerland’s “direct democracy” initiative process. Under current Swiss law, propositions that gain 100,000 signatures can trigger a national referendum.

The “1:12” initiative that Wermuth and his Juso vice-president Mattea Meyer organized would go on to gain broad union support and backing from Switzerland’s top two progressive parties, the Social Democrats and the Greens.

This past spring, the 1:12 effort filed enough signatures for ballot status — and Corporate Switzerland has been feverishly attacking the initiative ever since.

Any move to limit CEO pay to 12 times worker pay, charges SwissHoldings, the federation of Swiss-based multinationals, would constitute “a frontal attack on freedom” — and “prosperity,” too! If the measure passes, the SwissHoldings anti-1:12 manifesto declares, “almost all” of Switzerland’s 57 corporate giants “would be forced to restructure or move parts of their companies abroad.”

One Swiss lawmaker, Zurich’s Ruedi Noser, has ratcheted up the hysterics to an even higher level. A “yes” vote on the 1:12 proposition, he’s claiming, would turn Switzerland into the “North Korea of Europe.”

But Swiss society, 1:12 supporters counter, has functioned quite successfully in the not-so-distant past with quite narrow gaps between executive and worker compensation. In 1984, points out the Swiss Denknetz think tank, CEOs in Switzerland only averaged six times more in pay than average Swiss workers.

Many Swiss today still remember those more equal times, one reason why headlines about 21st century executive paydays — like the $100.5 million Credit Suisse CEO Brady Dougan grabbed in 2010 — so infuriate the general public.

In 2007, Swiss chief execs nationwide averaged 56 times more than average worker pay. But big companies pay their execs far more, the Swiss trade union federation points out, and these execs desperately want their gravy trains to continue. Nestle, the drugmaker Novartis, and other Swiss companies have been bombarding their employees with letters decrying the dangers 1:12 poses.

Swiss corporate execs unleashed a similar political blitz earlier this year when corporate gadfly Thomas Minder, a successful entrepreneur, led a campaign to give shareholders more say over top executive pay — and ban executive new-hire and “golden parachute” bonuses.

Swiss multinationals bitterly opposed Minder’s proposal. But his initiative passed anyway this past March, with a stunning 67.9 percent of the vote.

Corporate interests don’t have to reveal how many millions they’re pouring into the campaign to kill the 1:12 initiative, and some observers are estimating that initiative opponents may be outspending supporters by as much as 50 times.

Adding to the huge drumbeat against 1:12: official opposition from Switzerland’s Federal Council, the country’s ministerial cabinet. The Swiss media, meanwhile, have been overwhelmingly hostile as well.

“No major Swiss newspaper is supporting the 1:12 initiative,” Juso activist Mattea Meyer tells Too Much, and only about 15 percent of major media coverage, she estimates, has been friendly to the pay cap effort.

Remarkably enough, given this deeply unequal political playing field, the 1:12 initiative has remained competitive in the opinion polls. In October, one survey had the measure in a virtual dead-heat, with 44 percent both pro and con.

Polling released last week does have the “no” side gaining ground, and passage this Sunday, observers feel, remains a longshot. But however the vote goes, activist Cédric Wermuth stresses, egalitarians have made substantial progress.

“We’ve launched,” he notes, “a major debate about wage equality and a just income distribution, a subject regarded as taboo before.”

Advocates for the 1:12 initiative see their effort as part of a broader “strategic counter-project” to reverse top 1 percent-friendly rule changes that have made Switzerland so much less equal over recent decades, and next steps are filling the Swiss referendum pipeline.

Among these next steps: an initiative to create a basic minimum income for everyone in Switzerland — at the equivalent of $2,800 a month — and campaigns to put in place both a stiff inheritance tax and a new tax on foreigners using Switzerland as a tax haven.

Switzerland’s 1:12 activists also see themselves as part of a global effort, and 1:12-like campaigns, they note proudly, have taken root in France and Germany.

“We stay in close contact with them,” says Cédric Wermuth, who currently serves as a member of Switzerland’s federal parliament.

The Swiss 1:12 activists are also staying in close contact with leading global egalitarian thinkers. They’ve hosted talks in Zurich, Basel, and Bern, for instance, from the British epidemiologist Richard Wilkinson, one of the world’s foremost authorities on the impact of inequality on our daily lives.

The 1:12 effort, Wilkinson told Too Much last week, has already made a major contribution — by helping the entire world understand that businesses “do not have to be organized as systems for the undemocratic concentration of wealth and power.”
*****

By Sam Pizzigati - | Too Much | Truth Out |

Sam Pizzigati edits Too Much, the online weekly on excess and inequality published by the Washington, D.C.-based Institute for Policy Studies. toomuchonline.org

Truthout doesn’t take corporate funding - that’s how we’re able to confront the forces of greed and regression, with no strings attached. Instead, we need your support: make a donation today by clicking here.

Interested in helping support the 1:12 initiative? Supporters can make donations through the campaign’s online presence.
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JL A. (275)
Saturday November 23, 2013, 5:29 pm
May this be the start of a worldwide movement
 

Kit B. (276)
Saturday November 23, 2013, 5:45 pm

I was thinking the same thing.
 

Freya H. (304)
Saturday November 23, 2013, 6:22 pm
An admiral effort. However, those CEOs may figure out ways to sneak around this. Even the best law has some loopholes. Still, a worthy cause.
 

Roseann D. (178)
Sunday November 24, 2013, 2:59 am
What a great way to keep greedy American CEOs from going there. Yah, I wish it would catch on everywhere. Nowhere to run or hide...maybe they'd vacate the planet. WooHoo!
 

Ben Oscarsito (354)
Sunday November 24, 2013, 9:38 am
"...In effect, under this “1:12 Initiative for Fair Pay,” no Swiss company would be able to pay its top executives more in a month than the company’s lowest-paid workers make in a year...."
What a great idea! Why should they earn a THOUSAND times more than they are worth...? As for the map of Sweden; -I wish it would happen here...
 

Ben Oscarsito (354)
Sunday November 24, 2013, 9:44 am
Since many people don't know what is Switzerland and what is Sweden, here's a profile on Switzerland:
http://www.bbc.co.uk/news/world-europe-17980650
And, a profile on Sweden:
http://www.bbc.co.uk/news/world-europe-17955808
-You're welcome!
 

Mike M. (53)
Sunday November 24, 2013, 10:13 am
It will never happen in the state because CEO's are special kinda like gods to themselves and those who kiss up hoping for scraps
 

Joanne Dixon (38)
Sunday November 24, 2013, 12:29 pm
Unfortunately, it's over and it lost.
I don't like calling it a maximum wage. Any CEO can get a raise any time by just raising the bottom wage/salary.
The media in Switzerland think if it had gone for 50x instead of 12x it would have passed.
 

Arielle S. (317)
Sunday November 24, 2013, 1:49 pm
If this happened, I bet the minimum wage would rise and rise quickly. Lovely idea...
 

Birgit W. (144)
Sunday November 24, 2013, 3:00 pm
Freya says it all. Thank you.
 

Sharon Davidson (348)
Sunday November 24, 2013, 3:21 pm
hopefully some good will come from this thank you
 

Jelica R. (157)
Sunday November 24, 2013, 8:50 pm
There is still a referendum for a basic minimum income in Switzerland next year, and surely a heated debate over just salary has just started.

Also, there is an EU initiative for Unconditional Basic Income (UBI),

"Subject matter:
Asking the Commission, to encourage cooperation between the Member States (according to Art 156 TFEU) aiming to explore the Unconditional Basic Income (UBI) as a tool to improve their respective social security systems.

Main objectives:
In the long run the objective is to offer to each person in the EU the unconditional right as an individual, to having his/her material needs met to ensure a life of dignity as stated by the EU treaties, and to empower participation in society supported by the introduction of the UBI. In the short term, initiatives such as “pilot‐studies“ (Art 156 TFEU) and examination of different models of UBI (EP resolution 2010/2039(INI) §44) should be promoted by the EU.

Information on this proposed initiative is available in the following languages:
български čeština dansk Deutsch ελληνικά English español français italiano magyar Nederlands português română slovenčina slovenščina suomi svenska
..."

This petition must collect 1.000.000 signatures, and reach a threshold at least 7 EU states by 14. Jan 2014., to be subjected as a citizens' official initiative to the European Commission. EC then must respond by recommending procedure to implement UBI in all member states. Best case scenario says that in 10+ years every EU citizen, regardless of age and non/employment, will have a modest income to ensure a roof over one's head and bread on the table. For milk and honey, we will still have to work.

Please, forward this PETITION to all your friends resident of European Union states. Signatures are urgently needed!

Check current status on a map:
Statements of support by country

BTW, on 14, Sep, a citizens initiative on "Right on Water" was submitted to EC with 1.400.000+ signatures. It's goal is to prevent water privatizations and protect water as a common property.

Here is a list of all current EU citizens' Open initiatives
 

Sherri G. (111)
Monday November 25, 2013, 1:31 am
This needs to catch on world wide. TY Kit Noted.
 

Angelika R. (146)
Monday November 25, 2013, 7:30 am
Agree with all said above and will make a newspost of that European Initiative ASAP and also send out PMs to all on my list (plz pass on when you receive it, most have SOME Europeans among their friends, while mine are merely a hand ful) Thx Kit!
 

Angelika R. (146)
Monday November 25, 2013, 7:33 am
I am also extremely disappointed that it FAILED in Switzerland, heard it in the news late Sunday night, Joanne is always very well informed!
 

Winn Adams (191)
Monday November 25, 2013, 7:35 am
This needs to catch on throughout the world.
 

Kit B. (276)
Monday November 25, 2013, 8:00 am

The news on Al Jazeera:

The country voted 66 percent against the so-called "1:12 initiative for fair pay" that was brought forward by the youth wing of the Social Democrats (JUSO). The idea behind the proposal was that nobody should earn more in a month than others earn in a year.

[....] Opponents to the proposal had warned it would harm Switzerland by restricting the ability of firms to hire skilled staff, forcing firms to decamp abroad and resulting in a shortfall in social security contributions and higher taxes.

"It's an important decision for the Swiss business location," Valentin Vogt, president of the Swiss Association of Employers, told Swiss television SRF. "The Swiss people have clearly decided that it's not up to the state to have a say on pay."
*****

The same arguments that were used successfully in the US, to keep upper management salaries at ridiculous rates and keep those bonuses coming in, were successful in Switzerland.
I believe these are false equivalence, but I do understand how people can be led to believe that the economy would crash. The PR companies that create these points are not fools.

 

Franshisca Dearmas (91)
Monday November 25, 2013, 1:56 pm
Noted TY Kit
 
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