The 2013/03/20 at 08:27
As a reaction to the crisis, tension is rising in Europe against the salaries of company heads. The European Parliament and the Ecofin Council agreed, at the end of February, that the variable remuneration of bankers can be no higher than their fixed remuneration. In mid-March, it was Berlin's turn to announce that the German government would not wait for the European directives to be in place to set straight the salaries and bonuses of company heads.
Following the movement against high salaries, the Swiss have gone even further. In a referendum held on 3 March, a clear majority pronounced itself in favour of the popular "initiative against abusive remuneration". This core idea, which has emerged since 2008, aims at strengthening the influence, in companies listed on the stock exchange, of shareholders on the remuneration of board members and management.
60 million euro parachute
While already grounded in public opinion, the debate was reignited by the 72 million-Swiss franc (60 million-euro) package to be paid out to the former Chairman of Novartis, Daniel Vasella, in relation to a clause to prevent him from sharing his knowledge with competitors. Although this golden parachute has since been abandoned, it was enough to put oil on the fire and to discredit the campaign against the popular initiative led by Economiesuisse. This Swiss business federation representing over 100,000 Swiss companies, over one hundred branch associations, and twenty cantonal Chambers of Commerce, had launched a counter-offensive in the form of a campaign worth eight million Swiss francs (6.5 million euros).
"We've failed to convince our fellow citizens who still include large groups," regrets Ursula Fraefel, in charge of the Economiesuisse campaign. Pascal Gentinetta, Chairman of Economieusuisse, did not to fail to note, during the referendum campaign, that "while the initiative only concerned 263 corporations, in other words under 0.1 % of companies in the country, the outcome of the referendum would affect all SMEs, over one-third of which work closely with large groups".
Noting that it would have been counterproductive to recruit a company head for its campaign, Economiesuisse has now resolved itself to awaiting the legal texts to be voted in by Parliament in September. According to the first drafts, the general assembly of shareholders is to elect, once per year, the sum company heads are to be remunerated. The assembly may even vote against retirement packages.
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Pour Rudolf Wehrli, Chairman of Economiesuisse, the defeat not only affects his organisation, but all Swiss companies, and endangers the country's economy. Lawyers commissioned by the organisation point out a risk of Switzerland being isolated, leading Economiesuisse to question the country's long-term attractiveness in the eyes of foreign investors. Pascal Gentinetta wonders about the future of hiring upper executives in Switzerland as "candidates lack visibility on their income".
And this is without reckoning the exemplary value of the Swiss experience. Switzerland's "no" to abusive remuneration has indeed stained the rest of Europe. The 3 March referendum has had an influence on almost all German politicians in this pre-electoral period. A survey carried out in January this year by Statista, the German institute for statistics, revealed that 74 % of Germans consider company head remuneration to be too high, compared with 21 % who believe managers to be paid correctly. These results have been backed up by the declarations of Michel Barnier, European Commissioner for the Internal Market, who indicated at the start of March, that he is in favour of "making shareholders more responsible on pay". He specifies that "I am currently working on EU legislation that would give shareholders a mandatory say on remuneration."
Meanwhile, the Swiss intend to keep ahead in this domain and are preparing a new referendum, this time on the issue of wage disparities within companies. According to the proposal, the highest salary should not be more than twelve times the lowest salary in the company. The voters' opinions will be revealed in September this year.