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Swiss Referendum Backs Executive Pay Curbs
gollum123 writes in with news that Switzerland may soon have the world's strictest corporate rules. "Swiss voters have overwhelmingly backed proposals to impose some of the world's strictest controls on executive pay, final referendum results show. Nearly 68% of the voters supported plans to give shareholders a veto on compensation and ban big payouts for new and departing managers. The new measures will give Switzerland some of the world's strictest corporate rules. Shareholders will have a veto over salaries, golden handshakes will be forbidden, and managers of companies who flout the rules could face prison.The 'fat cat initiative', as it has been called, will be written into the Swiss constitution and apply to all Swiss companies listed on Switzerland's stock exchange. Support for the plans — brain child of Swiss businessman turned politician Thomas Minder — has been fueled by a series of perceived disasters for major Swiss companies, coupled with salaries and bonuses staying high."
"The job doesn't justify the salary."
Most people don't understand it's a matter of customer base (population size) and where you are in history, such salaries would be impossible in smaller societies. These exorbitant sums of money are artifacts of scale and historically large customer bases by which executives can exploit given their privileged position in society and history.
You should probably look up the difference between Communism and Socialism before you post. Not to mention this isn't really Socialism. That would be equal sharing - not just reigning in the disparity between the top 1% and the other 99%.
You should watch http://www.upworthy.com/9-out-of-10-americans-are-completely-wrong-about-this-mind-blowing-fact-2/
The vast majority of high-priced C-level hiring seems to be an exercise in some sort of magical thinking. Corporations see a success, and make a superficial attempt to imitate it. Throwing millions of dollars at one (or a handful) of executives is much easier than trying to understand their own internal dynamics.
"Steve Jobs turned Apple around, so what we need to do to make billions is find and hire the next Steve Jobs!" All while completely ignoring what Jobs actually did, leading to a situation where they'll pay millions for whichever executive wore more black turtlenecks over the last five years.
It's Cargo Cultism. Nice to see that the Swiss are taking a step away from it.
"Jealousy" eh? The mating call of libertarians whenever the subject of who's getting paid to do what comes up.
From hard won experience, I know that attempting to debate this directly with a lib is as productive as arguing with my cat about it pissing on a wall. So, strictly for others who may be listening:
The pay of top executives is usually determined by a supervisory board. Getting on a board doesn't require much work, in exchange for which members enjoy a number of benefits determined by executives. Getting onto and staying on boards in the first place requires staying in the good graces of company executives. Thus, a positive feedback loop occurs, resulting in executive pay and departure packages determined not by metrics that benefit the owners, but by friends doing each other favors.
It's usually very difficult for the diffuse class of owners to organize themselves to bring company executives to heel. What the Swiss have done is to make life a little bit easier for shareholders to exercise their rights.
Luke, help me take this mask off
To quote Plutarch (46 - 120 AD),
An imbalance between rich and poor is the oldest and most fatal ailment of all republics.
This and no other is the root from which a tyrant springs; when first he appears as a protector - Plato (423 to 327 BC)