Swiss Vote No To Cap On Top Managers’ Pay

Swiss voters soundly rejected on Sunday a proposal to limit the pay
of companies’ highest-paid managers to 12 times that of their
lowest-paid workers, a plan that business leaders had warned could
weaken the prosperous nation’s economy.

A projection by the gfs. Bern polling agency based on partial counting
showed voters shooting down the plan by a margin of 66 per cent to 34.
Initiatives need a majority of both voters and cantons (states) to pass
in a referendum; by Sunday afternoon, results from 20 of the 26 cantons
were in and all had voted against.

Sunday’s referendum came after voters in a March vote voiced anger at
perceived corporate greed by deciding to boost shareholders’ say on
executive pay and ban one-off bonuses known as “golden hellos” and
“goodbyes.”

However, the new “1:12 initiative” from Switzerland’s Young
Socialists calling for a fixed legal cap on pay appeared to be a step
too far for centrist and conservative voters.

Switzerland is home to global business players such as pharmaceutical
companies Novartis and Roche; insurance groups Zurich and Swiss Re; and
banks UBS and Credit Suisse.

Backers of the “1:12 initiative” argued that imposing a legal limit
on salaries would ensure greater fairness while still giving top bosses
the chance to earn more money than, for example, government ministers.

But Swiss business leaders argued it would weaken the nation’s
competitiveness, make it harder to attract top talent and likely prompt
some companies to move executives abroad.

Opponents included Sepp Blatter, the Swiss president of world
soccer’s governing body FIFA, who argued that it would have the
side-effect of seriously damaging Swiss soccer.

“Of course we’re disappointed,” Young Socialist leader David Roth told Swiss television.

“Our opponents succeeded in making people afraid,” he said, though he
insisted that there was “no future” for an “economic system based on
salaries in the millions, on financial speculation.”

The head of Switzerland’s employers’ association said he was greatly relieved.

“This is an important decision for Switzerland as a business
location,” Valentin Vogt said.

“The people have decided clearly that
setting salaries in this country is not a matter for the state.”

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