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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. They claim it offsets the high risks, but then they walk away with millions when it all goes wrong.
I do a good job as a matter of personal pride and professionalism, even though I'm not earning a massive salary and annual bonus.
const int one = 65536; (Silvermoon, Texture.cs)
SJW, n: "Someone I don't like, and by the way I'm a fuckwit" - AC
Before people scream socialism, this rule is to make shareholders vote on the executive pay of the company they own shares in, not government bureaucrats. This is to protect shareholders from greedy upper management.
It provides a mechanism by which shareholders can set a pay limit for executives, and veto large pay packages which they don't think are in their interests. Since shareholders nominally "own" the company, I'm not sure why that would be particularly controversial, except that companies have been to some extent captured by their management.
There is nothing here that prevents high corporate pay if the owners of the company feel it's justified.
10 PRINT CHR$(205.5+RND(1)); : GOTO 10
"this" has already passed. according to swiss constitution, a text that was validated in such a referendum MUST be written into law. guess the swiss will be able to get rid of those parasites...
Hey, hey, cut the guy some slack!
OP probably wanted to call out Balmer, and would have, if not for the fact he's still nursing a head wound from the last round of flying chairs.
An enigma, wrapped in a riddle, shrouded in bacon and cheese
Not making yourselves beholden to the capitalists is neither anti-freedom nor socialist.
Allowing CEOs and other board members to give themselves huge salaries and payouts is.
It's only America who irrationally believes "profit at any cost" is a good diea.
Fuck you.
...not just for corporations but also for the folks in Congress. While the former may theoretically happen, I do not see any Congressman voting for any measure that would limit his pay.
The shareholders exhibit very little power over the board because the board has manipulated the rules. Hope this gives the shareholders more direct control over people who are proving themselves incompetent.
No. No it wouldn't have.
CEOs are scarce because you need to have experience being a CEO in order to get hired as a CEO. This means working your way up through another department usually, or VP/COO jobs or some such at the very least. Usually this means the person is really good at ass kissing, and probably good at picking someone else to do his work for him. Alternately you're just related to someone that is or used to be really important. Hell that one can take you all the way to the oval office.
Unfortunately this system has progressed right down to middle management in most corporations and the majority of the CEO stock that didn't build a company from the ground up on their own are pretty much completely fucking useless. That particular pool of people is internationally extremely thin.
Making it less desirable to bullshit your way through a corporation may see some of the folks that have a brain becoming entrepreneurs themselves in order to earn that massive payout by building their own company. There is a lot of talent going to waste in middle management and lower positions in the form of people smarter than their bosses that won't get promoted purely because of that.
I can only see this as a good thing to promote competition and to promote more decentralized businesses and less "too-big-to-fail" corporations/banks.
This isn't even terrible socialist. A true socialist country would just enact a tax on the bonus that takes 75%+ of every dollar above x amount then throw it into public works projects etc....
Oh wait, that sounds familiar... where did that happen again?
Oh, right. In one of the biggest and best economic turnarounds in history right after the great depression, in the United States of America.
There is already no shortage of foreign CEOs in Swiss companies. The proportion of foreigners working in the country in high-paid jobs is really high.
As for perceived disasters, I don't know where they got that idea as the Swiss economy is thriving compared to the rest of the western world right now. The last catastrophe was the bankruptcy of Swissair and that was back in 2002. Plus the company was immediately reborn as a new airline (Swiss) with very little disruption of operations. Banks have had a hard time but I don't think that this is registered in the mind of people as being a problem coming from board members. If anything ticked the balance towards a yes to this initiative, that was Daniel Vasela, ex-CEO of Novartis, receiving a 72M CHF (about 76M USD) severance package as he left the company a mere two weeks before the vote (he later declined it).
Leaving Switzerland because of this law is like running away from your parents because they only bought you a V6 Mustang instead of a V8.
The difference between you and me is that you're anonymous and I am not.
signature is pants
Who are you to say that another person's salary is unjustified
A voice representing the majority who are not rewarded (to excess) for failure.
I'm guessing you make a lot more than that, as do most slashdotters. But the difference between you and me isn't money. The difference is that I have accepted my place in life, as well as the fact that certain others will have orders of magnitude more than I have.
I am compensated by my employer based on my performance and contributions to my company. Should I be compensated by my employer if I take away from my company?
The difference is that I can see right through the smokescreen of moral superiority.
Your moral compass is out of calibration.
What a bunch of bullshit. Perhaps if you knew anything about the wealth distribution in america you'd know otherwise.
The top bar is the ACTUAL distribution of wealth in america. Notice the next 40 getting a tiny bit and the bottom 40% getting next to nothing, so small is what they are paid they don't even register. This is real time slavery via the wage system.
http://www2.ucsc.edu/whorulesamerica/power/images/wealth/Actual_estimated_ideal_wealth_distribution.gif
http://www2.ucsc.edu/whorulesamerica/power/wealth.html
Yeah, that 46-bit version is unstable.
The difference is that I have accepted my place in life,
and ye shall forever be downtrodden as a result.
This has been discussed in the US, but, as in Switzerland, as a "veto" by shareholders. Shareholders should determine CEO compensation. The US SEC tracks the total compensation of the top 5 employees of publicly held companies, and those should be the ones the shareholders set salaries for.
The highest paid person in the company should have a total compensation set by a shareholder vote. Each shareholder puts in a number, and the share-weighted median is the CEO salary. The CEO can suggest a number, but it's not the default.
Who gets to vote the shares? The party that pays the taxes on them. Funds that are now tax pass-throughs would have to pass through voting rights to avoid being taxed. No taxation without representation.
For funds with a big portfolio, the shareholders can pick a compensation number for the whole fund, and the fund managers can set the compensation for each CEO. But the total can't exceed the shareholder-chosen value.
Now that's shareholder empowerment.
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.
The people are not customers of the government. The People own the government, because the People are the government.
I support this move by Switzerland and vow to buy only Swiss cheese from here on out.
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If the swiss economy is doing well, it's probably BECAUSE of decent regulations like this. We have a financial corruption and theft problem. A lot of things would be better if we hadn't deregulated in the US.
Try searching for that little tag.
signature is pants
I have no problems with founding entrepreneurs like Jobs and Zuckerberg making billions (Gates, a bit different because a lot of his wealth was directly tied to the way he flouted the antitrust laws in the '90s). And I'm not especially jealous of rich old men hanging around yacht clubs dousing themselves with single malt. But 8-digit compensation for CEOs of Fortune 500 companies is now routine, and I think this affects the way those companies are run. Exhibit A: the housing bubble and financial meltdown 2002-2008. Notice that it occurred during a Republican administration, after the POTUS cut tax rates for the wealthy and weakened oversight of antitrust and capital markets. Exhibit B: the obsession on quarterly earnings by companies and their boards, that causes companies to sacrifice innovation and responsibility to their workforce and the environment in the name of the shareholders.
Then there's the part in Atlas Shrugged where all the creators leave the moochers behind and go off to Gault Gulch and live off their perpetual motion machines.
Not bad, but I got far more results by searching "Anonymous Coward".
There's nothing like $HOME
Then you are saying this would be entirely justified then, because friends don't let friends drive Fords.
There is no God, and Dirac is his prophet.
As a shareholder of a given company, I have, or should have, the right to squeeze you by the balls as I take the money BACK out of your pocket and return it to the us, the owners of the company.
And I could give a rat's ass about moral superiority. You go do whatever your little heart desires, but keep your hands off of my money.
Curse the expiring mod points!!
Ultimately, it is the shareholders taking the risk, that assumption of risk should enable some say-so in the compensation of the management of the company.
If I choose to assign my risk by proxy to the board then I want them to make the decision for me and I get what I deserve. Or sue them for not doing their job.
After all, your solution is coercion.
No, our solution is give the right of determining the salary to the people that actually pay said salary.
A shareholder.
Ask the voters. I remember a few years back the Swiss had a referendum on whether the petrol price should go up, based on ... this, this and this. Referendum took place - answer was 'yes'.
Treat people like grown-ups and that's how they'll respond.
Here in NZ we had a private referendum to get the government to repeal a law. Vote was yes. Government ignored it, and the law is still in place. Any flights from Auckland to Zurich?
"The greatest lesson in life is to know that even fools are right sometimes" - Winston Churchill
You should never be able to get a bonus, as an executive, when you're company is losing money. Bankers seems to get bonuses no matter what. That defeats the point of a bonus.
The difference is that I have accepted my place in life,
and ye shall forever be downtrodden as a result.
While I understand what you're trying to say to the parent and even, to an extent, agree with you the other side of the argument is that if you don't learn to accept where you are in life then you can never be content. I would imagine the parent is probably referring to having found a place in life that they are happy with. That's kind of an important bit of wisdom since for many people being at the "top" doesn't lead to happiness.
For an example I'm at the top of my game, but not at the top of earnings. Still, I make plenty of money, have no problem paying bills, buy anything I want, and do whatever I want (within reason). I don't let people walk over me but I don't need to walk over them, either. I find most people would be a lot happier if they'd take a few moments to realize that they don't actually want to be at "the top," it's just our media machine that blasts you with that.
Of course I could be wrong, I don't know for certain, none of us do. Maybe the parent's just a slacker.
"Just a fox, a whisper."
"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
Not that capitalist private property requires the backing of guns
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)
The difference is that I have accepted my place in life,
and ye shall forever be downtrodden as a result.
Socialism never took root in America because the poor see themselves not as an exploited proletariat but as temporarily embarrassed millionaires. -- John Steinbeck
Trying to improve one's lot isn't a bad thing, and often should be encouraged. But sometimes it is just wishful thinking.
The trick is knowing when one is being ambitious and when one is being an idiot. Hard to tell at times.
Except the law isn't about keeping people from succeeding where others can not. The law is to allow shareholders in a company to establish limits on executive salaries. You build a private company from the ground up - by all means reap your profits. You take charge of an public company built by other people - those other people deserve to have a say in how much you get paid. Honestly it baffles me that bonuses for executives can go through without shareholder approval.
+1 Disagree
Quite rightly, sir.
Anyone who has the hubris to use the word "sheeple" is is effect saying "I alone understand the complexities of the world, my view is the correct one, and anyone who thinks differently than me does not deserve my attention."
"A voice representing the majority who are not rewarded (to excess) for failure."
A majority that often picks up the tab for those failures.
France isn't far from here. I don't see it falling apart. And Switzerland won't suffer, either.
The "everyone will leave, omg! Sky falling!" Is pure propaganda, nothing else. Doesn't happen. At most, some of the parasites will leave because they're not welcome anymore. If you have something useful to offer to the world, money is not your only motivation.
Assorted stuff I do sometimes: Lemuria.org
Yes, I do make more than that (modestly). I have accepted my place in life, and am quite happy about it.
What I do not accept is that there are people who work their asses off with 80+ hours a week to barely survive, and people who probably don't do even that in a month, and make over 100x what I make. I recently saw a CV of someone who had 3-4 CEO/BOD positions at a time, making between 350K and 750K each. Never less than $1M/year. That's absurd, and not horribly uncommon. Such people cannot be putting 40hrs/week in a job. They are certainly not working more than the rest compared to their salary. In a lot of cases, they were in the right place at the right time. Yes, the positioned themselves so that it was more likely, but there's still an element of luck.
If I wanted to, I could make $150k/year without much difficulty, but honestly, half of that would be absurdly comfortable IMO. I'd rather have other benefits.
What bothers me is that there are people who can work hard more than full time and starve (but not to death) because they need to work and it's better than starving to death, while someone else can work less than full time and make enough money to feed and shelter 7+ people.
Me, I'm in the middle. I work hard, but have a somewhat (I admit) cushy job and help people in the processes. I tend to work outside of business hours, but overall the pace is still relaxed, I put in my full work week, and I get paid enough to live quite comfortably on, and have some nice hobbies. I don't care about making $1M/year or even $100k/year - I just think that the people who struggle and make less than $25k/year or so shouldn't have to suffer so these people can make these ridiculous amounts.
Self proclaimed typo king, and inventor of the bear destroying coffee table (patent not pending).
If you boil this down, what you are left with is the disgusting stench of jealousy.
I'm going to ask my boss to increase my salary ten-fold (>> what he earns) and put that point to him.
Who are you to say that another person's salary is unjustified ... ?
As the salaries that we are talking about are exceptional (ie in the top ~0.5 percentile) it is those salaries that need to be justified, not their critics.
They try to justify these salaries either on a percentage of what they handle or by claiming "we need to get the best people". Both are bollocks. I am a senior engineer in the nuclear power industry. I make decisions that cost, or save, tens of millions of $$. Some are been decisions which, if wrong, could have lead to nuclear accidents that would be world headlines. I do get advice from specialists in particular areas such as metallurgy, nuclear physics etc, but so would a senior banker making his financial decisions. If I got 0.5% of the money I see passing through I'd be a multi-millionaire by now. But I regard it as all in a day's work and earn a flat-rate of somewhat under $100,000.
But at another level, consider a car mechanic maintaining brakes. He is maybe saving several lives (worth $1 million each?) every time he spots a leaking seal or worn-down pad. Should he get say 0.5% of that million every time, or is it again all in a day's work? Where does it stop?
As for "valuable" people, over and over again at work I have seen guys retire whom everyone thought were indispensable. Like Engineering Managers at power stations who were there when the places were being built and who knew every nut and bolt. Yet the week after they had gone it was as if they had never been there, like a hole in the water. No-one is indispensable. And many of those bankers were not even doing a good job.