Excite

Switzerland to vote on limiting executive pay ratios in radical move against inequality

  • Getty Images

Swiss voters will today to go the polls to vote on a proposition that would see executive pay reined in by law to a maximum of 12 times the lowest salary at the same company. It is the most radical measure to make it to this stage of the democratic process in the Western economies and comes as a result of the Swiss system of direct democracy where 100,000 signatures on any issue will force a referendum. It is difficult to see any government bringing such a measure to a vote, which speaks volumes about the representational inadequacies of most Western ‘democracies’.

Despite cultural caricatures of Switzerland as a haven for the super rich and conscience free in the face of hard cash, the Swiss it would seem have had enough of rampant inequality. While most medium sized businesses have a pay ratio averaging out at more like 1:5, the larger multi-national firms have become notorious for huge disparities of income, with the likes of pharmaceutical giant Roche racking up a ratio of 1:236.

Earlier this year, it came to light that the Swiss bank UBS had awarded $2.6 billion in bonuses – a figure that exactly matched the bank’s losses in 2012. In March, 68% of Swiss voters approved a plan to give shareholders a veto on compensation and ban ‘golden handshakes’.

Big business is naturally pouring money into the campaign to prevent this latest measure passing, singing the hackneyed refrain that the country will lose competitiveness and the economy will go into freefall. This threat of business decamping to more indulgent climates has effectively held the world to ransom since the financial crash of 2007 through an extraordinarily cynical boardroom game of 'divide and rule'.

But the campaign in favour of the measure has proved itself a canny operator. One group involved has been handing out free chocolate chip biscuits on the streets, telling people that they are welcome to take up to 12. No-one ever has the gall to actually take that many, which of course acts as a superbly potent metaphor.

Whether it passes or not, and early indications are that it won’t, the very fact that an entire nation is voting on such a proposition is in itself hugely significant. As is the framing of the motion. The Swiss proposal isn’t ‘anti wealth’ or ‘anti capitalist’, it is anti-inequality. By all means pay yourself millions – just as long as you are pulling up the lowest earners with you. But don’t expect to pay yourself exponentially more while your workers' incomes stagnate

Written by Cyrus Bozorgmehr - Google+ Profile - More articles by Cyrus Bozorgmehr

United Kingdom - Excite Network Copyright ©1995 - 2017