An­gry Swiss aren't done slim­ming the fat cats

The Pak Banker - - OPINION - Tim Ju­dah

THE Swiss have ap­proved a "fat-cat ref­er­en­dum" to limit ex­ec­u­tive pay by a crush­ing 68 per­cent to 32 per­cent, no great sur­prise per­haps given the cur­rent mood on bankers and other su­per­rich around the globe. Yet this is Switzer­land, not Greece, Italy or Spain and the vote isn't the end of it. Switzer­land is un­happy, and it is chang­ing. The ref­er­en­dum was the brain­child of Thomas Min­der. The in­de­pen­dent leg­is­la­tor be­gan his strug­gle to give share­hold­ers in Swiss-listed com­pa­nies the right to con­trol the pay of ex­ec­u­tives and board mem­bers in 2006. The anger that turned him into the man many Swiss see as an aveng­ing an­gel was sparked as long ago as 2001, when Swis­sair, the na­tional air­line, went bank­rupt.

Min­der's com­pany, which sup­plied tooth­paste to Swis­sair, was al­most driven to the wall be­cause its in­voices ini­tially went un­paid. Mario Corti, the chief ex­ec­u­tive of­fi­cer of Swis­sair's par­ent Sair Group, left the com­pany af­ter a few months, pock­et­ing 12 mil­lion Swiss francs (then $7.5 mil­lion) in an ad­vance pay­ment he didn't have to re­turn. Min­der's "yes" cam­paign in the ref­er­en­dum re­ceived a huge boost on Feb. 15, when it emerged that Daniel Vasella, the out­go­ing CEO of phar­ma­ceu­ti­cals com­pany No­var­tis AG, was to be given a $78 mil­lion pay­off over six years in ex­change for not work­ing for any of the com­pany's com­peti­tors. Vasella re­nounced the pay­off once the story broke, but it was too late. On the face of it, with low un­em­ploy­ment and one of the best stan­dards of liv­ing on the planet, or­di­nary Swiss have lit­tle to com­plain about. Still, they are wor­ried about how long they can fend off the cri­sis that has en­gulfed the rest of Europe, and dis­sat­is­fied with a feel­ing of be­ing ripped off by their elites. "It is scan­dalous. No one de­serves to be paid such mon­strously high salaries, es­pe­cially when their em­ploy­ees get paid not much in com­par­i­son," Mar­i­anne Lecoul­tre, a pen­sioner who lives in a mod­est flat on the out­skirts of Geneva, told me. Busi­ness lob­bies warned be­fore the March 2 ref­er­en­dum that re­strict­ing pay and bonuses could lead to an ex­o­dus of com­pa­nies from Switzer­land. That threat lacked punch, though, be­cause the Euro­pean Union is mov­ing in the same di­rec­tion. The vote also seemed to bear out Paul Rech­steiner, the pres­i­dent of the Swiss trade union con­fed­er­a­tion, who says that in op­pos­ing Min­der's plans, the government "un­der­es­ti­mates the prob­lem of low salaries" in Switzer­land. He was speak­ing last week in the cap­i­tal, Bern, about the re­sults of a Univer­sity of Geneva study his union com­mis­sioned, which found that 437,000 peo­ple, or 11.8 per­cent of em­ploy­ees, work for a sub­sis­tence level salary. The re­sult of the fat-cat vote will put wind in the sails of two more ref­er­en­dum ini­tia­tives. One would set a le­gal min­i­mum wage of 4,000 Swiss francs a month; the other is the so-called 1:12 ini­tia­tive, which would re­strict the high­est salary in a Swiss com­pany to no more than 12 times the low­est one. Joseph Jimenez, Vasella's re­place­ment at No­var­tis, earns for ex­am­ple, 266 times more than the low­est paid em­ployee in the com­pany, ac­cord­ing to data com­piled by the BBC. So­cial­ist Party Pres­i­dent Chris­tian Levrat said last week that peo­ple didn't care about the de­tails of the leg­is­la­tion that will fol­low from the fat-cat ref­er­en­dum, and just wanted to "send a mes­sage and ex­press their anger." Af­ter the vote, he said, it was his party's job to fol­low up. "Alone," he said, the ref­er­en­dum is "not enough to re­in­force so­cial jus­tice. It is just the be­gin­ning."

The Swiss like to think of them­selves as an egal­i­tar­ian peo­ple, brought up on the le­gend of Wil­liam Tell, who struck a blow for lib­erty and fa­mously shot an ap­ple from his son's head so as to win their free­dom.

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