Swiss vote to limit executive pay

Swiss voters are set to decide whether limiting executive pay is the way of the future.  Under the 1-to-12 Initiative, executive wages would be capped at 12 times the lowest salary in the firm.  The initiative had little support in Swiss parliament, though the debate was at times heated.  WRS’s Tony Ganzer reports.

Lawmakers had already broken for lunch, but members of the JUSO, the young Social Democrats, still unfurled their banners in support of the “1 to 12 Initiative.”

Party members like  Sascha Müller, a cantonal lawmaker from Graubünden, dressed in suits, portraying themselves as bankers who, they say, benefit from exorbitant wages.

MÜLLER: “In whole of Europe we see people screaming after equality and they need justice in this society.  And we offer justice with this 1 to 12 initiative.”

The fact many lawmakers are against this 1 to 12 idea doesn’t surprise or worry Müller.  It’s not unheard of for voters to go against lawmakers’ wishes, he says.  And politicians’ minds are already made up.

MÜLLER: “Opinions were made before, they will not change it.  They have like strong parties.  Sometimes on the right wing the parties function like a dictatorship and everyone shares the opinion of the boss.”

Whether or not that’s true is debatable, but the right-wing Swiss People’s Party did bring some of the more colorful arguments to the floor debates.

Valais MP Oskar Freysinger, for example, recited a poem, while Aargau MP Ulrich Giezendanner spoke from experience.

GIEZENDANNER: (translated) “Contrary to my employees, in the good times I made more than 12 times the lowest salary sometimes.  That’s where I am.  When I had some extra francs on the side I didn’t take a luxury vacation, or  buy Rolls Royces or big houses.  You know what I did with the saved money?  I founded other companies.  I bought into other companies.  The companies offer more than 600 jobs in the country.  More than 600, all because sometimes I gave myself more than 12 times the lowest salary.  Think about that.”

The 1 to 12 ratio is currently far over-stepped by many of the biggest companies in Switzerland.  Data from trade union federation Travail.Suisse shows Novartis CEO Joseph Jimenez earns 266 times more than the lowest employee, for example.  Nestle CEO Paul Bulcke is said to make 215 times the lowest paid employee.

Social Democrat MP Cedric Wermuth argued excessive pay had fundamentally changed the Swiss economy.

WERMUTH: (translated) “The big amounts going into executive pockets have led to our economy being changed into a self-service outlet over the last years.  Unfortunately with the consent of  most of the people in this chamber.  While the productivity rate, for example, has risen about 20 index points since 1994, the growth of the median real wage stays clearly behind at about 6 or 7 percent.”

Swiss People’s Party MP Giezendanner directed Wermuth back to the issue of job creation, during Wermuth’s tenure as president of the Young Social Democrats.

GIEZENDANNER: (translated) “Mr. Wermuth, you as the president of the Young Social Democrats, how many jobs have you  created?  None.  Zero.  That’s how it is.  How much risk capital on the left side did you put in out of your own pocket? None.  You always just take.  That’s simply it.  I had to tell you.”

That jab from right to left prompted the next speaker, Social Democrat Yvonne Feri, to change tack.

FERI: (translated) “I would like to speak again to the content here and not be so polemical.  We need more transparency in wages, because the lack of transparency in wages is one of the biggest problems in gender wage equality.  The 1 to 12 Initiative would also help with this problem.”

The Council of States must still give its thoughts on the initiative before voters will make the ultimate decision.  Voters have limited salaries before:  the city of Bern capped how much municipal workers can take home.

But government pay is much different than that of multinational corporations.  And opponents to the initiative say limiting pay is bad for business.

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