Swiss outrage over executive pay sparks a movement in Europe

By Peter Gumbel
November 15, 2013

Here’s an idea for how to end corporate greed and reverse the trend of growing income inequality worldwide: impose a new rule that would limit the pay of top executives to just 12 times that of the lowest-paid employees at the same firm. In other words, prevent CEOs from earning more in one month than the lowliest shop-floor worker earns in a year.

This proposal might sound like something cooked up by Occupy Wall Street or another radical protest movement, but in fact it comes from the heartland of a nation not usually known for its disdain of money-making: Switzerland. On Nov. 24, the Swiss will vote in a referendum on whether to enshrine the 1:12 pay ratio — in their national constitution, no less.

The initiative is backed by an assortment of mainstream political groups, including the Social Democratic Party and the Greens, who argue that CEO pay in Switzerland has gotten out of control and needs to be reined in. They quote a raft of figures to show that the ratio of top to bottom earners in Swiss firms has grown from about 1 to 6 in 1984, to 1 to 43 today. And that’s just the average. In some companies, especially banks, the gap is much wider, with top executives such as Brady Dougan, the American CEO of Credit Suisse, and Andrea Orcel, head of investment banking at UBS, earning hundreds of times as much as their juniors.

The campaign’s backers consider salary inequality to be a social injustice. A video cartoon made by the Social Democrats features a Swiss nurse who is astounded by the way top manager salaries have grown to “astronomical” proportions, even as hers has barely increased. Regula Rytz, a co-head of the Greens, says that a constitutional amendment is necessary because neither the government nor business has “a recipe against the self-service mentality in corporate suites.”

Swiss business, meanwhile, has made a so-far successful effort to sway public opinion. A month ago, public opinion for and against the initiative was split at about 44 percent. Swiss business launched a public relations campaign, warning that the measure would spark an exodus of corporations. Employers’ associations commissioned studies that predicted lost jobs and higher taxes if the measure is passed. The latest polls this week suggest that the measure is unlikely to be approved, with just over 50 percent opposing it.

Even so, the issue isn’t likely to go away, and is gaining traction beyond Switzerland. Kristina Schüpbach, leader of the youth wing of the Social Democrats and one of the campaign initiators, says that “the main thing this time is to get a result that sends a strong signal” — to business and government. Significantly, the 1:12 campaign has made inroads in Spain, where the opposition Social Democrats have just adopted it as official policy. Schüpbach says the idea of setting a ceiling on pay ratios is also being discussed within the opposition Social Democratic Party in Germany. And more broadly, the issue of executive pay has become a red-hot political topic in France and elsewhere on the continent.

Bruce Kogut, director of the Sanford C. Bernstein Center for Leadership and Ethics at Columbia Business School, says the issue resonates in Europe “because people care more about equity” than they do in the U.S. But he also sees salary caps as a reaction to the pain of the financial crisis. “There have not been major consequences. Collective expiation of guilt and responsibility is lacking,” Kogut says.

Switzerland, with its history of Calvinism and the Protestant work ethic, is particularly fertile ground for this issue. The nation has lived through a series of corporate calamities in the past decade, including the collapse of Swissair in 2001 after it racked up an unmanageable level of debt. One of the most shocking blows to many Swiss was the state rescue of UBS in 2008, after the bank incurred giant losses from its foray into American mortgage-backed securities and other derivatives.

Huge payouts to executives at struggling companies have added fuel to the flames. The referendum campaigners point out that last year, UBS paid out a total of 2.5 billion Swiss francs in bonuses, at the same time as it reported a 2.5 billion franc loss. Pro-reform activists have calculated that it would take an ordinary bank employee as much as 385 years to earn the 18.5 million franc ($20 million) compensation package given to Orcel, the investment bank head, when he joined UBS from Merrill Lynch last year. (UBS has defended the package, claiming that it compensates Orcel for a loss of deferred pay when he left Merrill Lynch. The total bonus pool, the bank says, was paid out to a range of employees and not just top management.)

Orcel was already at UBS last March, when in a previous referendum, the Swiss approved an initiative that gives shareholders of listed Swiss companies a binding say in the compensation paid to their directors. It also sharply curtailed “golden handshakes” and other special bonuses.

Still, imposing caps on pay ratios turns out to be quite a bit harder than it sounds. Coming up with reliable statistics is a particular challenge. Publicly-traded companies in America and in many European countries are required to disclose the salaries and benefits paid to their CEO and other top executives. But obtaining data for the lowest-paid workers is much harder. Some Swiss opponents of the referendum question the accuracy of the figures issued by the campaign initiators.

The U.S. is an example of how difficult and politically fraught such an exercise can be. Three years ago, under section 953(b) of the Dodd-Frank Act, Congress ordered public companies to disclose the ratio of CEO pay to the annual median compensation of employees. So far, however, this stipulation has not been enforced, and the HR Policy Association’s Center on Executive Compensation, for one, believes the enforcement is “not worth the cost” to companies.

Supporters of income equality would argue that in the United States, even more so than Switzerland, such an investment is worthwhile. The Economic Policy Institute calculates that the CEO-to-worker compensation ratio in the top 350 largest U.S. firms is 231:1, including realized stock options. That’s more than five times the gap in Switzerland. According to the institute, CEO compensation grew by more than 725 percent between 1978 and 2011, at a time when the annual compensation of a typical private-sector worker grew by just 5.7 percent.

In both the U.S. and Switzerland, the public debate over pay ratios is just getting started. Schüpbach, the organizer of the Swiss initiative, says that even if the referendum doesn’t produce a majority vote in favor of the measure on majority on Nov. 24, the campaign will continue. “There’ll be a second, third or fourth attempt,” she says.

It remains to be seen whether even these renewed efforts will put a brake on runaway executive pay. But at the least, they put business on the defensive to justify huge packages.

PHOTO: A combination picture shows ’1:12′ flags adorning various houses in Bern and Zurich in November 2013. REUTERS/Staff

63 comments

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“The Economic Policy Institute calculates that the CEO-to-worker compensation ratio in the top 350 largest U.S. firms is 231:1″

That is a completely unsustainable number. You cannot fool the majority of people that their boss’s time is worth 231 times more than their own. Even in a country as allergic to socialism as the USA(no matter the benefit) there will be an eventual backlash.

Posted by anarcurt | Report as abusive

CEO:Janitor = 1:12. CEO’s aren’t the only employees that these people would probably think receive unfairly high pay relative to the Janitor. Does this mean ALL employees above the base Janitor level will share the sacrifice in the interest of equality, and accept significant salary reductions? Thought not. Next brilliant idea?

Posted by sarkozyrocks | Report as abusive

Wouldn’t it be nice if this was a movement supported by the G20? Then corporation would be less inclined to move to another home.
@sarkozyrocks has a point. He’s wrong about the janitor though, no corporation has them on the payroll, they are contracted. But others still have base wage people. Say
$8 * 2040hrs * 12 = $199,680.00. It would be difficult to limit a corporation to basically 12 pay brackets. Perhaps 1:20 would be ok ($326,400.00). Keeping in mind this is employee compensation, not principals/investors payouts. Of course you would have to state that a hired or contracted employee could not receive any other incentives or the banksters would just invent some new “financial instruments” to circumvent.

Posted by tmc | Report as abusive

Would only have teeth if it included all benefits (current and new tricks) Most CEOs are happy with 1 dollar pay salary while soaking in the tens of millions on stock comp.

I think something more reasonable like 1:50 might get some wheels.

Posted by Butch_from_PA | Report as abusive

It seems to me if the law were passed it would both (a) push the top wages DOWN and, (b) push the bottom wages UP.

So putting it in terms of America, where the bottom wage is currently around $8/hour, we would see that $8 bottom wage go UP.

After the law was passed let’s say hypothetically, at a fast food company, its $8 went up, by the invisible hand, to $10. Then the president could be paid $120 per hour max.

That sounds pretty darn fair to me. The people at the bottom are often the ones doing the hardest, grueling work.

The one at the top today happens, this very day, to be flying to Aspen for a conference, reviewing a spreadsheet, and complaining to his secretary, over champagne, how hard his life is. (231:1)

The 1:12 law sounds like it could bring great benefits to society, maybe.

Posted by AdamSmith | Report as abusive

Wow, punishing people for being smart and productive…yeah, what a great idea.

Posted by CF137 | Report as abusive

A SWIFT SOLUTION !
If you want to find some real, honest and caring politicians make the ratio 1:1 !!!

Why should a politician earn more than a doctor, a teacher or a farmer ? ? ?

We will also get rid of all those psychopaths that are plaguing our governments and institutions and that are creating chaos in a world that needs more humanity and less profits !!!

Posted by Francisx | Report as abusive

12:1 seems a bit low while 231:1 is outrageous. Where are the activist investors when needed?

Posted by SanPa | Report as abusive

CF137

At present hourly employees ARE being punished in not receiving productivity increases.

Also, CF137 executive pay is based market research of pay at like institutions, not productivity!

Posted by Flash1022 | Report as abusive

That would be extremely unfair. And of course I’m not a CEO nor somebody with a similar salary. I think there should be no limit to the salary a person might earn. If a private company is willing to pay that much, it means that this person is very capable and his contribution to the company is huge and valuable. If there is a limit to his maximum salary and he thinks he could be paid more he will just leave the country and move to a place without this extremely illiberal law. If this law passes the result will be that the best CEOs will just move abroad and Switzerland industry will loose ground.

Posted by Na86 | Report as abusive

For a country, this is star worthy behavior.

Posted by 2Borknot2B | Report as abusive

Simply put, those who work their fingers to the bone and make huge profits even possible are stepped on by those in higher places who STEAL the just compensation for those who did the work. No rich CEO can even marginally justify their inflated sense of self-worth outside of the analytical framework of the average greedy 8 year old.

Posted by Newsrocket | Report as abusive

@Newsrocket makes a good point.

And it reminds me what the real Adam Smith said in “The Wealth of Nations” published in 1776, the same year coincidentally as the American Declaration of Independence.

At that time great fortunes were being made in America from the use of slavery. But according to Adam Smith, the production of CORN, although a great, staple crop in America, was not suitable for slavery because of the relatively high degree of skill and attention needed, the wide competition, and the smaller efficient scale. The yeoman American farmer could make a good profit from corn production because fertile land was almost free.

TOBACCO production, however, was a more lucrative crop than corn, and so slavery fit it better. Large fortunes were being made growing tobacco in 1776 with slaves. You could make mistakes and still there was enough margin left for high profits.

SUGAR production by plantations in the West Indies, such as Jamaica, Cuba, etc., Smith said, was the lucrative of all, and the world market for sugar was insatiable.

SUGAR was thus most suitable of all for large-scale slavery, and that’s where the truly giant fortunes were being made, even if the management of the plantation was sloppy and inefficient.

My guess is that when the sugar plantation owners were criticized in any way, they probably gave the same retort that we hear today from the highly paid corporate executives: “You shouldn’t punish us because we are the smart, productive people.”

When in fact they are not even one bit smarter than the average citizen.

Posted by AdamSmith | Report as abusive

There are only two ways to get really wealthy:

Steal it, in large bits or small, or inherit it from someone who stole it.

Wealth represents stealing from the commons – taking for ones’ own what is required for the support and for the thriving of all of us.

Wealth is in a systems sense loss from the flow, ripped and sequestered for private benefit – with no consequence for the thief (except social reward and acclaim) and all expenses to the rest of us.

We must be stupid to allow anything like a ratio of top to bottom like we have in the “first world” and in particular in the US and Europe.

We still buy into the fantasy that we will be on top personally some day so it (sacrifice, inequity and the unequal distribution of reward for effort) will be worth it, because we will have ours too… we’ll have pie in the sky bye and bye, – we hope for upward mobility and for unearned wealth to drop on our heads.

Magical thinking and it will not work, but we will not learn, until too late.

Posted by Phoebos | Report as abusive

My 77-old mother who lived most of her life in the USSR, said it would be not fair! In the USSR, the ratio was ca. 1:10 (no scientific research.)

Yes, the executives are not liable for their actions. Responsibility and liability are what is worth paying.

Needless to say that the decision of the Swiss people may have serious consequences. It’s a country of high exposure.

Posted by OUTPOST2012.NET | Report as abusive

I have been advocating this all through this austerity regime. The ‘little’ people have been trodden on for far to long. Either pay wages as a percentage of ‘Profit’ or introduce a Ratio. The cost of ‘Living’ is getting more and more expensive, far too many are merely ‘existing’ after working 40 hours?

Posted by Rollo57 | Report as abusive

Good Job, Good People of Switzerland. Yes, we need an international worker solidarity movement to stop insatiable corporate greed and theft of government assets by the top 1% global financial elite. Perhaps an international “Strike for a Day” to show them we mean business? Time for greed, fed by unregulated predatory capitalism, to be knocked down to size.

Posted by njglea | Report as abusive

“In other words, prevent CEOs from earning more in one month than the lowliest shop-floor worker earns in a year.” Why does the article call this a 1:12 ratio? It’s a 1:144 ratio.

Posted by clasqm | Report as abusive

No, sorry, misread that.

Posted by clasqm | Report as abusive

@tmc if you think $200,000 is not reasonable for upper limit and $330,000 would be more fair all you have to do is raise the minimum wage from $8 to $13/hr

Posted by MarinoP | Report as abusive

The current system is unsustainable. Not only are the wrong behaviors rewarded, and to an extreme, but anyone who takes the time to ponder a system based upon the idea of perpetual and unlimited growth based upon finite resources is a recipe for extinction. Recalibrating the system requires beginning with reining in the executive pay which is completely out-of-control and has NOTHING TO DO WITH INTELLIGENCE OR GOOD POLICIES. Anyone who says otherwise has not looked at the golden parachutes of executives forced out after losing years at the helm.

THERE USED TO BE A PRINCIPLE CALLED “SOCIAL RESPONSIBILITY” THAT took the view that society did not exist to keep businesses afloat…businesses existed for society. When business activities harmed society, they were policed. We need to get back to that idea.

Posted by GinaDe | Report as abusive

Unfortunately since the Business and politics in the US are in bed with each other a 12:1 restriction would never pass.

Posted by js331975 | Report as abusive

Doing so would be just too smart & productive.

Posted by Will321 | Report as abusive

@ OUTPOST2012.NET
I can confirm it. A graduate with engineering background earned 120 rubles per month as did a charwoman. The minimum salary was 70 rubles. So, even a higher ration than 1:12 was possible.

The proposal came from “young socialists” known for their radicalism. BTW, Swiss voted against 35-hour week instead of 42.

Posted by behave | Report as abusive

Democratic control over every aspect of everyday life. Of…By…& for the People. Smart & Productive & sane.

Posted by Will321 | Report as abusive

CEOs themselves should get behind this, unless they want to find themselves eaten alive by e.g. me when the revolution comes. The only ‘difficulty’ on obtaining salary statistics of average employees is the corporations’ refusal to do so without back-breaking fines being meted out for non-compliance. By all means, break their backs.

Posted by brianpforbes | Report as abusive

Can we, PLEASE, do this in the United States? PLEASE?

Posted by zelduh | Report as abusive

@ zelduh
Are you talking about this democratic vote? Should be possible since the US is the most democratic country of the free in the world.

Posted by behave | Report as abusive

This is not in any way comparable to a Sov economy, in which salaries were attached to titles (with quotas, perhaps) but not to productivity. Start with the basic assumption of a capitalist system then layer it with a tax system that requires whatever ratio the locals think is worthwhile and it’s certainly a democratic system. Anybody who thinks Switzerland and most of Europe doesn’t already do this lives in a hole in a tree somewhere. However, I have great faith in the banksters’ ability (and outright stubbornness) to outmanoeuvre anything the plebs put forth. The best way to reduce the ratio is to vote for those who support strong regulators and to buy stocks in these firms, join up with others and vote on a board that keeps stockholders and the public in mind over their cronies at the money pit.

Posted by forinfan | Report as abusive

To bring the ratio of 1:12 a bit more into context. The minimum salary in Switzerland is around 18$ per hour. The social welfare is much better than in the US. The gap between the wages was never so big until a few years ago. So probably it would be to radical for more conservative countries to even think about such a solution, as it unfortunately probably will also fail in Switzerland with just a support of maybe 30% to 40% of the citizens (considering current polls).
The initiative text actually says that all money you receive in connection to your employment counts as salary. (http://www.admin.ch/ch/d/pore/vi/vis375 t.html)

Another interesting referendum the Swiss Citizens actually voted yes was the Swiss referendum “against rip-off salaries” of 2013. http://en.wikipedia.org/wiki/Swiss_refer endum_%22against_rip-off_salaries%22

Posted by arusel | Report as abusive

‘since the US is the most democratic country of the free in the world’?
where did you get that crap from? the US is the least democratic democracy in the world, if we shall even grant you to call yourselves that…

Posted by stephanie.s | Report as abusive

Guess we’ll have to more our business to Singapore -

Posted by WonderfulWorld | Report as abusive

Where will these execs move? You can raise taxes in Paris for example and the rich will stay because there isn’t another Paris or New-York or Beverley Hills. They won’t move to Somalia. That’s just a bluff. If they move. Let them!

Posted by Duffman | Report as abusive

this 12:1 talk is incredibly naive. evidently it makes people feel better to conclude that high earners have cheated society. while that might explain a very small number of the cases, it’s not representative of the norm. good luck hiring a capable ceo at 12:1. if you need delicate brain surgery, do you want the surgeon compensated at 12x the janitor?

Posted by jambrytay | Report as abusive

Personally, I’m much more likely to trust a brain surgeon making a perfectly fair wage than one who has a one yacht per dozen surgeries approach. The one working for 12x a janitor’s pay is much more likely to actually be passionate about medicine than the one who chose surgery over banking because biology looked easier than math.

Posted by roboticowl | Report as abusive

High ‘earners’ have cheated society, first of all by calling themselves ‘earners’ rather than the more appropriate ‘fleecers’. I can say with confidence that one could raise legions of effective CEOs with less than 200 years training (that’s what their salary grade claims they’re worth, right?)

Posted by brianpforbes | Report as abusive

@tmc: Exactly. The directors of corporations are playing us all off against each other. It’s about time for us to stand together on this. G20!

Posted by matthewslyman | Report as abusive

@jambrytay: Does the brain surgeon NEED >12x the Janitor’s hourly pay rate? If so, WHY? Sure, the janitor might be more replaceable, and we might be in a free market; but why not make some rules, set some parameters that will make the system a little more fair?
Would you have anything against a 20x wage-rate ratio limit? 50x? 100x?

Posted by matthewslyman | Report as abusive

The simple maths of this is wrong. How are Switzerland planning to hang onto the best CEOs and business specialists in the world if they can’t afford to do so. Quite simply, for a CEO salary of $3m, which is not any stretch for modern business, the lowest employee salary would have to be $250,000. Yeah, seriously. Who can afford that? Ok let’s make the salary lower then. Average wage in Switzerland is around $75,000 making the max CEO salary on average $900,000. Yeah, of course that’s using round figures and there are many different pay structures for different industries, but even double that to just under $2m. Do you really expect the top CEOs and experts get paid that? They’re not paid that just because of a title. The whole business system would be extremely flawed if every executive rose to where they were through luck, fraud or some other improper practice. Clearly they’re there because, at least for the overwhelming majority, they’re good at what they do. Alternatively, let’s just pay all the lowest workers $500,000 and send every company bust, or make them have massive job cuts. Makes sense. About time people need to start understanding that by penalising productive and smart workers, all that happens is that it remove the motivation for success. If you need to put a measure in place, fine. But 12:1, that’s just ridiculous. If this did somehow manage to get a following and get passed, I wonder how long it’d be before Switzerland collapses. I give it a week…

Posted by flitwick | Report as abusive

@matthewslyman
call it return on investment. While a janitor did nothing to achieve his salary level, a brain surgeon invested time and work in it.

Posted by behave | Report as abusive

lets first stop all of these ridicules subsidies to the huge corporations !!

Posted by mystics | Report as abusive

Excessive CEO compensation is harmful because it results in cultural changes where
- greed and avarice becomes acceptable
- corruption of government and politicians by moneyed interests is the norm
- that divides countries and societies into haves and have nots

Posted by theagitator | Report as abusive

So who gets to decide that a CEO is worth 300x or 600x what other essential employees are paid?

Answer: It is never the free market. It is decided by other CEOs on he BOD with the same vested interest, just as it has been decided that certain unessential business segments such as financial services should be vastly over-compensated. It happens because of inbred conflicts of interest and those who wish to instill privilege in a group.

Posted by theagitator | Report as abusive

Who decides? The socium they belong to.
We can talk about the values of individualism.
However, in the end, they (we) all are members of society. The society has various roles. Teachers do their job. Policemen do their job.
We should never forget that the economic activity of a society’s member doesn’t make him/her “special.”
The society has unlimited rights to decide all questions about how it is organized.
Including the issues of compensations or profits on capital invested.

Posted by OUTPOST2012.NET | Report as abusive

This is a very interesting initiative. I would support this one, or others that are similar. However, as the business groups point out, a unilateral change would end up with either a lack of top executives there, or an exodus of the companies.

While I am OK with the 12:1 ratio, one that I like better is (in the US), no CEO has compensation greater than the US President. A similar proposition could be made in other countries with their heads of state. I think implementation as EU policy is the next step.

Posted by DrAGG | Report as abusive

First of all, the article states that this initiative hasn’t been “cooked up by Occupy Wall Street or another radical protest movement”. That’s totally wrong. The young socialists of Switzerland (JUSO) actually do consist of occupiers and other left-wing radicals. By the way: The greens now want to ban cars (!) on Swiss roads. Absurd? Oh yes.

Secondly, that article completely neglects to mention possible consequences. A few have been named in this comment section (Where to find suitable top managers for int’l companies?). But there are more: Companies would actually have to lower most wages in order to maintain at least a slight income gradient on the upper management levels. But more importantly: Switzerland has a highly progressive tax system. Top earners contribute massively to the countries total tax revenue. What happens to average taxes when these wages break away? Exactly.
And furthermore, we live in an international economy. Many companies would just close their doors in Switzerland. They didn’t grow here because of the nice view on the alps but because of a free market environment. Simple as that.

As a Swiss, I am very concerned about the fact that our great system of direct democracy is more and more abused by young left-wing and right-wing radicals (I use different terms when in private) that come up with potentially auto-destructive initiatives like 1:12. But maybe we have just grown too rich and too saturated and maybe we’ve got to commit economic suicide before we realize again that poverty is not a noble attitude but plain agony.

Posted by jaegerpe | Report as abusive

Of course all this doesn’t take into account that the money system itself is majorly flawed. Apart from money being treated as a goal in itself instead of a means to communicate, express appreciation and yeah, pay.
By the way our currencies are defined, we willingly participate in sticking our heads in a tightening noose. Ever increasing debts will eventually lead to a total downfall of the system. As mentioned by GinaDe.

Posted by Inlakech | Report as abusive

@OUTPOST2012.NET

What society are you talking about? There are organized clubs of plumbers and loose circles of brain surgeons.

Posted by behave | Report as abusive

I mean “society” in the sense how the political science understands it.

Society/nation/national state/We The People, etc.

Posted by OUTPOST2012.NET | Report as abusive

@OUTPOST2012.NET
The political science as I unterstand it serves the interests of exactly those circles where one earns 20 times of a janitor.

Posted by behave | Report as abusive

@jaegerpe

I am sceptical in regards of the number – but not the idea itself.
What number would you suggest? As we see within the last 5+ years, the market can’t solve the problem.

Whatever is the outcome, it may have profound consequences in OECD countries.

Posted by OUTPOST2012.NET | Report as abusive

@outpost2012
Thanks for asking. I wouldn’t suggest any number at all. However, I agree with all those who claim that the system is currently flawed. In my opinion the problem lies within the relationship between the managers (including BoD’s) and the shareholders. I think that the shareholders have failed to look after their interests in the past decades. Because the shares of a company are nowadays mainly owned by other companies and pension funds. That leads to a “big money industry” that has a huge conflict of interests and therefore covers itself. In my opinion, we have to start here.
Just recently, the Swiss voted yes on an initiative that aims to strengthen the rights (and the duties) of shareholders (google “minder initiative” or “against rip-off-salaries”). I think that is a good approach. Killing capitalism is not.

Posted by jaegerpe | Report as abusive

Should be a law limiting ANYONE on this planet from having more than a certain amount of money — because over a certain amount is hoarding the resources of the planet – to the detriment of others.

A man’s labour is a resource, and NO ONE should have the freedom to keep taking, taking, taking, while others go without, go without, go without.

Posted by BunchOfLiars | Report as abusive

The payment overall should be normalised. The Swizz certainly is a great country all in all. One problem i see is that the people with these gross salaries usually are in power and would sooner move their business elsewhere than risk loosing their insane salary and/or bonuses.

Theres a Swedish company owner, perhaps you’ve heard of minecraft? the game was a huge success and where there is success.. money is sure to follow, but instead of hoarding it to himself, he distributed it to everyone in the company, those that had contributed the most to the project got the most money.

The problem as always is greed, there is no way you can justify someone earning fifty… a hundred or even two hundred times plus than anyone else. if people set examples and shared rightfully to everyone who contributes, this law wouldn’t have to even exist.

Posted by Lyrion | Report as abusive

This is a really stupid idea. It is not going to help low skill workers and will hurt high income people, leading them to move production out of Switzerland. Like all of Marx’s ideas, they sound good until implemented, when they result in a more or less universal poverty.

Posted by zotdoc | Report as abusive

The Marx’s idea was a society without any currency.
A society without any state. That was/is called communism.
The idea fo communism had never been implemented.
What many people call “communism” had nothing to do with Marx.
Marx’s ideas can be compared – with the Start Trek economy.

Posted by OUTPOST2012.NET | Report as abusive

Its nothing but a bunch of people that are jealous of what other people have. They didnt work their asses off to be as sucessful, so they have to protest out of jealousy. Nothing more. If you want something, work hard and get it.

Posted by Necrosaro420 | Report as abusive

Whether it be 1381 in England or 1917 in Russia, society corrects perceived wealth aberrations all by itself; without need for laws.

Posted by user4301 | Report as abusive

It’s very good point; I must admit.
However, human society evolves.
We all would love to see the trend of perceived wealth aberrations being corrected in the States.

Societal life has been changing. More people get educated; attitudes towards definitions “fair” – “unfair”; the need of economy in work force decreases.

I would be happy to deliver a good news to the adepts of “laissez faire.” But I have none. Sorry.

Posted by OUTPOST2012.NET | Report as abusive

“They didn’t work their asses off to be as sucessful” — The top-earning CEO’s did not work 400x, or 100x, or even 50x harder than the guy at the bottom. Most low- and middle-wage workers actually work harder, with fewer benefits. The problem is how we value various types of work. In my mind (and the mind of many), the work of a CEO or even middle-manager is not nearly as valuable as the work product of people at the bottom who are actually DOING the physical work. Sure, being able to supervise a gang of differently-skilled workers, and coach them into better team productivity is worth *something* — but not worth as much as most of them are being paid.

Posted by knitterman | Report as abusive

The lowest paid workers everywhere are the ones “working their asses off”, especially those in developing nations with no option but to be exploited for crumbs just to survive. No ass is worth $10 million a year. There would be many many competent managers willing and able to perform the same task willing for a fraction of what top CEO’s are paid, if the recruitment process was a fair, transparent, merit-based, equal opportunity. Impose a ratio limit that is commensurate to the burden of responsibility, level of education and experience required of top managers. Grossly disproportionate salaries are greedy, unfair and exploitative of a system lacking in the regulation needed to rein in people when financial power goes to their heads, as it does.

Posted by KwaSandra | Report as abusive

it seems that most people agree with this idea but the question is what the ratio should be. This can be answered with an annual referendum so voters can annually democratically adjust their CEO’s salary.

also there are capitalist voices on here who speak of the economy as if it were some kind of god!??

Posted by vt-05 | Report as abusive

If this passed, would they (the corporations) not simply hide additional CEO and executive compensation in the form of bonuses?

Posted by Groth1175 | Report as abusive