Switzerland In the News

The Wall Street Journal ran the article “Swiss Voters Reject High-Pay Initiative” today. They gave it front page space, while it was nowhere to be found on the New York Times site or even the Washington Post pages. This is an interesting choice that the front page, mostly because it seems like this is an international issue that doesn’t touch base with the United States at all. So why chose this, out of other topics, to place on the front page? Maybe this has something to do with business and money, which draws most readers of this particular news source. Or maybe the editor was making a statement of comparison to the situation in the US with the widening gap between lower class and high class earners.

The initiative would have restricted executive salaries to 12 times that of the lowest paid employee. The organizers believed “that no one in a Swiss company should earn more in a month than someone else makes in a year.” It was rejected by 65% of voters. Only 34% supported the proposal.

The article describes a related proposal that passed. “It will require a binding shareholder vote on executive salaries at all publicly traded Swiss companies and also will ban signing bonuses, golden parachutes and other forms of compensation.” Does this start to sound like an issue that has been raised recently in America? Perhaps during the firing of CEOs during the economic collapse? The biggest outrage was that these men, who helped tank the economy, lost their jobs…but were rewarded with millions.

One of the most curious sentences in this piece was that “Major companies also urged employees to think carefully before heading to the polls.” What kind of urging took place? ‘Urge’ is a harmless term, but could potentially mean more. The journalist should have expanded on this statement, as it may have been the most important part of the issue. 

The president of the Social Democratic Party of Switzerland, David Roth “said the country had missed an opportunity to curb executive pay that it sees as spiraling out of control. ‘We're obviously disappointed at the result, but we were faced by opponents who ran a high-profile fear campaign.’”

Obviously, spurred by the last point (companies urging an outcome), this should have been a red flag for the journalist to begin researching. While this idea isn’t shocking in itself, it could have been a jumping off point. What kind of tactics were the companies using to persuade employees? What if jobs were threatened? What if livelihoods were at risk? These are questions that the article raises. But then, what if Roth’s statement evoked questions that weren’t fair to the companies? What if the companies simply asked their employees to think about consequences and left it at that?

The final bit of the article is my favorite: “Public anger over corporate pay reached a peak in February, when local media reported that Novartis was planning an exit package that could have totaled 72 million Swiss francs ($79 million) for former chairman Daniel Vasella . Faced with a backlash that included public comments by the country's justice minister, Novartis scrapped the original plan for a package worth roughly 5 million francs, including cash and shares.”

Public outrage caused a company to backtrack on the ridiculous severance package to a chairman. Maybe because Switzerland is such a small country, their voices matter more. The company has to keep it’s consumers happy. It’s just an interesting juxtaposition between what happened with the CEOs in America when our economy began its downward spiral.