Inequality fight shines light on bonuses

Denmark’s next Government may target executive bonuses as a way to tackle growing inequality. With an election due within the next six months, the head of parliament’s biggest party and the woman who polls show may become Prime Minister spoke of tougher regulation to target those with “fat wallets”.

Social Democrat leader Mette Frederiksen said her party was ready to “start with the very large bonuses paid by Danish businesses” as part of a set of measures she says will achieve better income equality.

The tone of the political debate in Denmark has shifted as lawmakers react to multiple scandals in the financial industry. At the same time, Denmark is trying to track down billions of dollars from financiers accused of defrauding the country by claiming tax rebates on false dividends.

Frederiksen says she finds the examples particularly galling against the backdrop of rising inequality in Denmark. On top of the banking and dividend scandals, a series of high profile cases have stirred public outrage in Denmark in recent years.

The chief executive of payment company Nets, Bo Nilsson, has reportedly made more than 500 million kroner ($111m) from bonuses and stock options as the business went through both an initial public offering and a private equity buyout during his tenure. Lars Marcher, who heads medical equipment maker Ambu, has a stock option programme that’s now worth more than 400 million kroner following a surge in the value of the shares.

“As a social democrat I’m unable to comprehend that, at a time when inequality is growing and the top of society is getting ahead of the rest, huge bonuses are still paid while regular salaried workers are wondering what’s going on,” Frederiksen told reporters this week.

She said the recent scandals were “adding to the lack of sympathy for big bonuses” in Denmark.

The Danish debate is part of a global discussion on inequality fuelled by the likes of author Thomas Piketty, who recently launched a Manifesto for the Democratisation of Europe that calls for additional taxes on the profits of major corporations and on high earners.