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Swiss "Fat Cats" Clobbered As 70% Just Say Non/Nein/No To Excessive Executive Pay

Tyler Durden's picture


A few days ago, to the surprise of many, the European Parliament voted through substantial curbs on banker pay, limiting bonuses to twice the annual salary (we have yet to see the list of pre-existing loopholes, which we are confident will be wide enough for Arnold's hummer to pass through). Today, in a less surprising, although perhaps more notable development, more than two-thirds of the Swiss people voted through a proposal to curb "fat cat-ism" in Switzerland, and impose strict controls on executive pay, including compensation vetos and payout bans.

The development is notable, because unlike other insolvent nations, Switzerland is actually one of the most affluent sovereigns in the world, and class warfare is hardly as much an issue as it is in the US. The fact that Swiss society is as polarized as it was confirmed to be this morning, shows just how deep the rich vs, well, non-rich tensions truly lie, even in the most wealthy of societies. One can then imagine how close to snapping they are in other less well-off places, read most countries, in the world.

From BBC:

Swiss voters appear to have backed proposals to impose some of the world's strictest controls on executive pay, projected referendum results suggest.

Some 70% are thought to have supported plans to give shareholders a veto on compensation and ban big payouts for new and departing managers.

Business groups argued the proposals would damage Swiss competitiveness.

But analysts say ordinary Swiss are concerned about a growing economic divide in the country.

The vote comes just days after the EU approved measures to cap bankers bonuses.

Official first results from Geneva, where polling ended at noon (11:00 GMT), showed 67.7% voted in favour of the initiative.

Projections by polling institute Gfs.Bern for Swiss state television, based on early results, showed 70% backing the proposals across the country.

The BBC's Imogen Foulkes, in Berne, says multibillion dollar losses by Swiss banking giant UBS, and thousands of redundancies at pharmaceutical company Novartis, have caused anger in Switzerland - because high salaries and bonuses for managers continued unchanged.

The new measures will give Switzerland some of the world's strictest corporate rules, our correspondent adds.

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.
* * *
One of the organisers of the referendum, Brigitte Moser Harder, told the BBC she thought the Swiss people agreed with the proposals because the gap between rich and poor had become wider.

"From the beginning, 2006, we had the support of the people of Switzerland because you know not everybody in Switzerland is rich.

"It's also a social problem because the high wages got higher and the small ones sometimes just got lower. I think people have the support of the Swiss people because of that."

Meanwhile in the country in which the rich-poor gap is the widest it has ever been, there is not a single solitary voice of activism seeking to impose the same curbs on ridiculous executive compensation which has ballooned out of any proportion and can best be summarized by inforgraphics such as this:

CEO Pay Put In Perspective


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Sun, 03/03/2013 - 11:10 | 3295260 Manthong
Manthong's picture

Executive to worker pay ratios are only important in failing socialist economies.

Sun, 03/03/2013 - 11:33 | 3295285 falak pema
falak pema's picture

you mean they don't apply in "successful socialist economies", like China, Norway and Sweden?

What about in failing capitalist economies? 

Sun, 03/03/2013 - 13:44 | 3295432 Manthong
Manthong's picture

A successful socialist system has no discontent and will succeed on its own because each provides according to his ability and each takes according to his needs.. except that there is no freedom to take according to your needs unless you are an elite which means you are not really a socialist, but a functionary or tyrant in an empire.

The concept of a successful socialist system is an oxymoron and a fallacy.

China, Norway and Sweden all exist as "successful" socialists to one extent or another due to transient distortions and manipulation of resources.

When the global bank money tide goes out the socialist boats will go down with everyone else.

The USA has turned socialist and compensation disparity is again an issue because the economy is failing.

Mon, 03/04/2013 - 13:00 | 3298073 Ahmeexnal
Ahmeexnal's picture

Norway and Sweden ARE NOT SOCIALIST.

Sun, 03/03/2013 - 15:54 | 3295781 archon
archon's picture

Making the discussion about CEO pay only distracts from the real cause of the gap between the "rich" and the "poor"... namely, that the chief mission of communists and assorted leftists worldwide is to wipe out the middle class and make them poor.  This will have a far more drastic impact on the CEO/worker pay ratio than CEO pay alone.  This then becomes fuel for class warfare as they whine and done on and on about "CEO pay inequity".  The sheep then bleat and bleat, "CEO pay... CEO pay..." as they are being led to the slaughter...

Sun, 03/03/2013 - 18:08 | 3296000 zhandax
zhandax's picture

Turn off your fucking tv.  Who the hell do you think the 'rich' are?  kim cardashian and friends?

Sun, 03/03/2013 - 18:50 | 3296088 IdiocracyIsAlre...
IdiocracyIsAlreadyHere's picture

Oh please with the whole "communists and leftists" and the "class warfare" schtick.  It is old and tired and completely misses the point.  The problem with CEO pay is the whole concept of "CEO" itself.  Traditional corporate structure had officers (President, Secretary, Treasurer, ect. who were elected by the board of directors/shareholders) and could be removed by the same.  The point being that officers themselves were owners/shareholders and had responsibility to look after the other shareholders or be voted out for dereliction of duty.  CEOs, CFOs, COOs, ect. are most often nothing more than excessively compensated hired guns who have no real motivation to their companies long-term success outside cashing in on their stock options and getting their golden parachute before it all goes crashing to the ground.  Repeat- CEOs ARE NOTHING MORE THAN EMPLOYEES THEMSELVES - much more overpaid, parasitical and usually more useless the low-level drone who sits around playing games and logging in to Facebook all day.  So yeah, CEO pay in relation to salary of other EMPLOYEES is an a valid issue.  

So go ahead and keep railing about "sheep" without any sort of irony or self-awareness.  The parasite class just loves people like you ranting about "the 47%" and "welfare queens" while they continue to loot what they had no part in creating on a much larger scale.


Sun, 03/03/2013 - 19:36 | 3296167 archon
archon's picture

LMAO @ what you call the "parasite class", as if "the 47%" and "welfare queens" are the real producers in society...  You have obviously swallowed the class warfare rhetoric hook, line and sinker.  This is why America is totally f*cked - because the "47%" on government benefits thinks the other 53% of taxpayers who actually pay the bills for their welfare and food stamps are the parasites.

Sun, 03/03/2013 - 21:23 | 3296428 IdiocracyIsAlre...
IdiocracyIsAlreadyHere's picture

Wow you really are a moron.  That is not what I said at all.  I merely pointed out that the bankster/CEO class is a much larger form of parasite than the welfare moochers you waste your time endlessly moaning about.  I did not make any such claim that "welfare queens" contribute any value to society - in fact they are being subsidize d by TBTF to keep you angry at minor targets while ignoring the giant bloodsucking ticks that are finding new and creative ways to extract enormous wealth for themselves while contributing very little, in fact destroying much by taking companies that once produced something then downsized, outsourced and bankrupted them while keeping all of their perks and bonuses and other goodies.  Losses?  Those are for the retail investors and the "little people" many of whom started the business in the first place.

But I'm sure you'll go on being a useful idiot with no reading comprehension.

Sun, 03/03/2013 - 23:18 | 3296722 zhandax
zhandax's picture

IOW, this is what you were trying to say?

America, America has become a second-rate power. Its trade deficit and its fiscal deficit are at nightmare proportions. Now, in the days of the free market, when our country was a top industrial power, there was accountability to the stockholder. The Carnegies, the Mellons, the men that built this great industrial empire, made sure of it because it was their money at stake. Today, management has no stake in the company! All together, these men sitting up here own less than three percent of the company. And where does Mr. Cromwell put his million-dollar salary? Not in Teldar stock. He owns less than one percent. You own the company. That's right - you, the stockholder. And you are all being royally screwed over by these, these bureaucrats, with their, their steak lunches, their hunting and fishing trips, their, their corporate jets and golden parachutes.

This isn't some new discovery.  The above is from 1987.  26 fuckin' years later, Switzerland finally did something.  But they are generally considered 'quaint'.

Sun, 03/03/2013 - 12:00 | 3295348 Edward Fiatski
Edward Fiatski's picture

Exactly. This is a fucking union brochure. 

When (LOL) those MOST EXCELLENT workers start a successful company and produce value, then they all could tell us to shut the fuck up & draw 7 figure salaries.

Meanwhile - Deal With It.

Sun, 03/03/2013 - 14:14 | 3295582 Itch
Itch's picture

Fat cats listening to the ramblings of people like you must get on their knees thanking god for such fools, you maniacal sycophantic arse kissing whore. Because unlike you, they are well aware that they are on the take; 78 million pounds (£££) was paid to a pharmaceutical fat cat in Switzerland in the same year he laid off over 1000 staff… but that’s not all he got, because when you meet him he’s going to get a free blow job too.

Sun, 03/03/2013 - 16:16 | 3295820 Edward Fiatski
Edward Fiatski's picture

Cry me a fucking river.

Peasants with no sense of self-worth, or self-esteem - will be peasants.

Sun, 03/03/2013 - 19:08 | 3296123 IdiocracyIsAlre...
IdiocracyIsAlreadyHere's picture

And the same people always whining about "unions" usually have no clue that CEOs are nothing more than EMPLOYEES themselves. Often of the most useless parasitical sort.  They often have no ownership interest in the company whatsoever other than stock options which they will cash out before they crash the whole thing to the ground.  The office drone who sits around surfing the net most of they day is generally much more deserving of their pay than they average CEO.

Sun, 03/03/2013 - 14:09 | 3295572 legal eagle
legal eagle's picture

Good grief Charlie Brown, does anyone think this will reduce banker's pay?   Yahoo, look for 20% increases in salaries next month.  Look for better pension plans.  Look for other ways to indirectly compensate.  

Sun, 03/03/2013 - 15:40 | 3295755 Old Poor Richard
Old Poor Richard's picture

Like the USA?


Sun, 03/03/2013 - 16:07 | 3295805 thisandthat
thisandthat's picture

Exactly what I was going to say - you nailed it right in the head, amigo: socialist scumbags, that's what they are!

And what's with that referendum thing (does anyone even know what the f*ck that is?) - can't they just have elections and just be done with it, like true democracies™ do? Isn't that what governments exist for, after all - decide what's better for you, so that you don't need to bother with those decisions things?

Pfff... losers - all of them - they'll never gonna be anything in life, I'm telling you!

Sun, 03/03/2013 - 23:36 | 3296770 zhandax
zhandax's picture

like true democracies

Do you know what a 'true democracy' looks like?  A sheep and two wolves voting on what to have for dinner.  The US is allegedly a Republic, dipshit.

Mon, 03/04/2013 - 09:30 | 3297396 thisandthat
thisandthat's picture


blah blah I can't read. I'm genius.


Shove it.


Sun, 03/03/2013 - 11:13 | 3295262 Buckaroo Banzai
Buckaroo Banzai's picture

United Healthcare: well, now I know what my insurance premiums are getting me.

Sun, 03/03/2013 - 11:37 | 3295308 Smegley Wanxalot
Smegley Wanxalot's picture

And you don't switch to another provider ... why?

Sun, 03/03/2013 - 11:41 | 3295314 GMadScientist
GMadScientist's picture

He lives in a state where the only healthcare provider is UHC.

Sun, 03/03/2013 - 11:49 | 3295330 Smegley Wanxalot
Smegley Wanxalot's picture

so .... move

Sun, 03/03/2013 - 11:58 | 3295347 GMadScientist
GMadScientist's picture

A bit difficult when one needs medical care, don'tcha think?


Sun, 03/03/2013 - 12:21 | 3295372 Smegley Wanxalot
Smegley Wanxalot's picture

So, you know Buckaroo's state of residence, the offerings of medical insurances there, and that he is sick on his deathbed.  Tell me GMad, is your head also deeply embedded up Buckaroo's ass, or just up your own?

Sun, 03/03/2013 - 12:40 | 3295425 GMadScientist
GMadScientist's picture

Lets just say that you're very aptly named and leave it at that.

Sun, 03/03/2013 - 11:14 | 3295264 JustObserving
JustObserving's picture

How are executives going to say "I make more money than you?"  Jamie Dimon would lose his best line if he worked in Europe.

Sun, 03/03/2013 - 11:43 | 3295317 GMadScientist
GMadScientist's picture

By having 15 "jobs" at the max compensation level.

Sun, 03/03/2013 - 18:21 | 3296029 zhandax
zhandax's picture

Not as outlandish as you may think.  What do you want to bet this pushes up board of director's compensation in Switzerland?  It is not uncommon for one person to sit on multiple boards.

Sun, 03/03/2013 - 12:52 | 3295448 Ghordius
Ghordius's picture

and who knows, mayby we lose the kind of banker like Jamie Dimon in europe

a lot is hanging on what the British FinMin is going to get as special exception for the UK

Sun, 03/03/2013 - 11:13 | 3295265 AssFire
AssFire's picture

Note: Fannie and Freddy's debt is not kept on the books and is not included in the $16T national debt.

I'm guessing they own a lot of gutted houses at this point.

Sun, 03/03/2013 - 11:20 | 3295272 JustObserving
JustObserving's picture

$123 trillion in unfunded liabilities is not kept on the books either.  If you are a business or local or state government in USA, you are required by law to keep your liabilities on your books.  But no such rules apply to the Federal government.

Sun, 03/03/2013 - 11:34 | 3295303 Global Hunter
Global Hunter's picture

as if making it legal for the "representatives" of the people to insider trade all day long wasn't bad  enough!

Sun, 03/03/2013 - 11:20 | 3295271 schatzi
schatzi's picture REAL democracy in action.

Sun, 03/03/2013 - 11:23 | 3295275 BurningFuld
BurningFuld's picture

Man are people stupid. All they have to do is mark bank assets to what they are really worth and this whole shit show ends.

Sun, 03/03/2013 - 11:32 | 3295301 GMadScientist
GMadScientist's picture

And an entirely different shitshow begins. That's the problem with these can't take them out without blowing up your own building.

Sun, 03/03/2013 - 11:24 | 3295277 GMadScientist
GMadScientist's picture

The system breaks man, child, and women into figures
2 columns for "who is" and "who ain't" niggas
Numbers are hard and real and they never have feelings
But you push too hard, even numbers have limits
Why did one straw break the camel's back?
Here's the secret: The million other straws underneath it

Sun, 03/03/2013 - 11:26 | 3295286 Smegley Wanxalot
Smegley Wanxalot's picture

Remind me again why I should give a fuck about what others earn?

My only interest is what I earn.

Sun, 03/03/2013 - 11:30 | 3295296 GMadScientist
GMadScientist's picture

It's more about worrying what the average person is not least if you want economic growth.

Sun, 03/03/2013 - 11:46 | 3295325 Smegley Wanxalot
Smegley Wanxalot's picture

As I said - my interest is what I earn.


Perhaps your beloved average person should give a fuck about his/her own income AND DO SOMETHING PRODUCTIVE ABOUT IT if they dont like what they are getting. In my experience, bitching about your boss's pay doesn't do a whole lot to increase your own income, but getting off your fat ass, innovating, exploring alternative avenues to generate income/wealth, and just being generally self-responsible and not a fucking moron does a whole lot.  But you please go ahead and defend the victim mentality like a whiny prick.

Sun, 03/03/2013 - 11:59 | 3295352 GMadScientist
GMadScientist's picture

You keep sucking on that pipedream like a good little sycophant.

Sun, 03/03/2013 - 12:58 | 3295460 U4 eee aaa
U4 eee aaa's picture

Do you want to tell him or should I that it is an exhaust pipe

Sun, 03/03/2013 - 13:16 | 3295494 GMadScientist
GMadScientist's picture

Ssshhh....he's almost unconscious.

That may be why he's completely focused on the "how much" and paying little to no attention to "how" those massive CEO salaries and bonuses are made.

Sun, 03/03/2013 - 11:41 | 3295312 Global Hunter
Global Hunter's picture

Unless you're in the extreme minority, the money printing that has decreased the value of your earnings is going in part to a few connected CEO's and board members bonuses.  This can only happen in a centrally planned economy, in a free market economy this small minority of bandits that are making 8 figure bonuses would be dependent on the charity of others to eat.

Sun, 03/03/2013 - 12:32 | 3295416 holgerdanske
holgerdanske's picture

Because their earnings are your costs. I wouldn't care if I could just tell them to go forth and multiply, society forces you to participate and to pay them. You must have insurance, you must have a bank account, you have to belong to a medical society and, depending on where you live, sanitation, power and water might well be mandatory.


That's why!

Sun, 03/03/2013 - 12:56 | 3295457 U4 eee aaa
U4 eee aaa's picture

Because they can afford to buy ten cars and there are only 5 on the lot


go ahead....compete

Sun, 03/03/2013 - 14:21 | 3295593 Blankenstein
Blankenstein's picture

I care when it is someone like the Tan Man (Mozillo - Countrywide) who got a slap on the wrist after his company had a large part in creating the housing bubble and subsequent crisis.  And the gooberment was completely involved via the "Friends of Angelo" program (Chris Dodd) and the likes of Henry Cisneros on the board of Countrywide.  Now the taxpayer is still bailing out the mess created by these thugs and they are living large.

Sun, 03/03/2013 - 11:30 | 3295291 Global Hunter
Global Hunter's picture

(One of) The problem with a centrally planned socialist/fascist economy that rewards its most useful idiots with large amounts of fiat paper is that it gives the thugs, psychopaths and pedophiles a clear path to the top.  Normal human beings on the other hand when having to live a life of lies and corruption get heavy shoulders and hearts making them less useful to the centrally planned economy.

Sun, 03/03/2013 - 11:42 | 3295313 Arbysauce
Arbysauce's picture

Whoah, don't smear all pedophiles just because a few of them are politicians.

Sun, 03/03/2013 - 11:44 | 3295320 GMadScientist
GMadScientist's picture

Always nice to see the psychopaths coming out in support of the pedophiles. Solidarnost!

Sun, 03/03/2013 - 11:29 | 3295293 P Rankmug
P Rankmug's picture

If we had functioning free economic markets defined by a stable unit of account that would actually clear incompetent failed CEOs from their positions, we wouldn't have to worry about class warfare excessive pay.  The market would take care of it.  Alas, in our global central bankers fiat controlled (temporarily) world, the days of free markets are so Victorian.  

Sun, 03/03/2013 - 11:31 | 3295300 GMadScientist
GMadScientist's picture

Despite a couple centuries worth of evidence to the contrary?


Sun, 03/03/2013 - 11:48 | 3295326 P Rankmug
P Rankmug's picture

Yes, there always were and always will be economic inequities.  To the extent a free market provides a fluid society, where one has the ability to move up and down the economic ladder based on some combination of skill, talent, intelligence, education, or luck, class warfare envy is not a factor.  Once the economic ladder rungs are removed and one becomes cemented in their class by our centrally planned determiners of winners and losers, then the social chasms rise to the forefront. 

Sun, 03/03/2013 - 12:03 | 3295358 GMadScientist
GMadScientist's picture

Agreed that class mobility is the primary issue, but disagree that the situation is any better under unfettered capitalism. There's more than one way to tilt a playing field.

Sun, 03/03/2013 - 19:19 | 3296140 GeorgeHayduke
GeorgeHayduke's picture

Might as well give it up GM. The whole "free markets" mantra has become a religious experience for most folks here on ZH. Despite overwhelming historical evidence to the contrary, both economic and of human nature, they still believe this mythical free market would solve all problems if just given a chance. Such is the nature of a dogma that appeals to the emotions so easily.

Sun, 03/03/2013 - 19:21 | 3296144 akak
akak's picture

Might as well give it up Hayduck. The whole statist "coercion is good" mantra has become a religious experience for most folks outside of ZH. Despite overwhelming historical evidence to the contrary, both economic and of human nature, they still believe this mythical "benevolent institutionalization of violence" would solve all problems if just given a chance. Such is the nature of a dogma that appeals to the emotions so easily.

Sun, 03/03/2013 - 20:20 | 3296282 GeorgeHayduke
GeorgeHayduke's picture

I didn't say I was a statist. That's your own either/or mind at work. I based my statement on what history and real world evidence provide. As I stated earlier, I see no empirical or historical evidence to support the "absolutely unfettered free markets solve all problems" mantra thrown out for every situation by many on here. If you have any actual evidence of absolutely free markets operating in an advanced technological society and how that society is far superior to any existing similar societies that do have systems involving things you might call socialism, I would be quite happy to see it.

If, on the other hand, all you have are anecdotes and insults then you will likely prove my earlier comment about dogmas and their adherents. Step up genius and show me my errors. I'll actually consider anything relevant, which is likely more than you could ever consider for a point of view that opposes your apparent preset beliefs.

Sun, 03/03/2013 - 21:50 | 3296497 GMadScientist
GMadScientist's picture

Hey look, two groups of people who are both half-right!

Shame neither group knows it, or they might actually achieve binocular vision and depth perception.

Sun, 03/03/2013 - 21:48 | 3296486 GMadScientist
GMadScientist's picture

That's the are such a great tool for most economic problems...they just suck for those problems where demand is inflexible or monopolies form easily; the zealots can't make these distinctions so it's easier to see them as solving all problems and ignoring those areas where they don't function as well.

The same is true of has utility, but becomes burdensome when applied to the wrong problems (e.g. anything involving subtle questions of morality).

Sun, 03/03/2013 - 11:34 | 3295304 Arbysauce
Arbysauce's picture

This chart proves that all incomes should be determined by the National Socialist Compensation Committee. There, I said what you wanted to say but were too chickenshit.

Sun, 03/03/2013 - 11:40 | 3295306 GMadScientist
GMadScientist's picture

Shit, I'd settle for binding shareholder votes on compensation, but instead we get decisions handed down from unaccountable executive committees.

Sun, 03/03/2013 - 11:44 | 3295321 Global Hunter
Global Hunter's picture

Disagree it is national socialist policies that have caused this situation in the first place.  It is a system run by and for the benefit of liars and cheats.

Sun, 03/03/2013 - 12:06 | 3295363 Arbysauce
Arbysauce's picture

Yes I hate the extent to which *some* business is in bed with gov, but Bill Gates didn't make it by sucking govcock. How about a chart that highlights how much taxpayer dough gets funneled to these corps?

Sun, 03/03/2013 - 11:59 | 3295351 stickyfingers
stickyfingers's picture

United Health 1737:1 That's a lot of denied claims.

Sun, 03/03/2013 - 12:01 | 3295356 GMadScientist
GMadScientist's picture

And whole mess of unhealthcare premiums...or, as they know them, dead peasant coupons.

Sun, 03/03/2013 - 12:07 | 3295364 Edward Fiatski
Edward Fiatski's picture



Sun, 03/03/2013 - 12:41 | 3295429 resurger
resurger's picture

I dont think you have seen their KPI's, they are really intricate.

Lion's are big cats, they rest and fuck for 20 hours and work 4...

Sun, 03/03/2013 - 12:01 | 3295355 TahoeBilly2012
TahoeBilly2012's picture

Let them pay them whatever they want, just end the fiat currency system where Corps get first dibs on freshly printed fiat AND are too big to fail. Level the monetary playing field and leave people alone.

Sun, 03/03/2013 - 12:11 | 3295373 Bicycle Repairman
Bicycle Repairman's picture

Why does this matter? 

As a shareholder there is the matter of agency risk i.e. managment runs the company based on it's personal agenda, exclusive of the needs of the shareholders or any other stakeholders.

As a citizen, when power is concentrated in a few hands, those people run society.  Every single aspect of society, and "citizens" become "subjects" i.e. a democracy or republic becomes impossible, despite "what is written."

Of course, exceptionally rich people need to be considered as well as top executives.

Sun, 03/03/2013 - 12:17 | 3295383 Its_the_economy...
Its_the_economy_stupid's picture

I'll be impressed when corporate boards limit banker pay to a reasonable multiple of janitor pay. Everything else is bread and circuses.

Sun, 03/03/2013 - 12:20 | 3295392 Arbysauce
Arbysauce's picture

Please! Keep the focus on the people who can legally shoot you if you don't comply with the system. As long as my taxes aren't helping to pay these salaries I don't care how big they are.

Sun, 03/03/2013 - 12:26 | 3295404 holgerdanske
holgerdanske's picture

This is about time. Most people don't know it, but they indirectly contribute to this ridiculous state of affairs.

Your pension and your life insurances are largely invested in equities (which you will shortly have good reasons to regret!, but hat is beside the point) These pension and life insurance companies have 1000nds of investors like you, and they obviously have quite a large say in how the companies in which they invest are run. It is further widely accepted that captains of industy sit on each others boards.

So with their votes on your behalf, they frequent the annual shareholders meetings, and condone these outrageous salaries and bonuses, because the favour will be returned on their own annual meeting.


Now you know where the high admin fees go!


They are robbing you blind. The Swiss have seen this and acted.

There is only one hope, that is direct democracy like in Switzerland. Or revolution, unless you are real sheep, and then you should read Orwells 1984.

Sun, 03/03/2013 - 12:34 | 3295418 swissaustrian
swissaustrian's picture

I feel ashamed of my country today. This socialist BS won't achieve anything.

Sun, 03/03/2013 - 12:54 | 3295453 AvoidingTaxation
AvoidingTaxation's picture

I voted Si. This initiative don t serve a socialist agenda and contains some interesting provisions empowering shareholders.

I m clearly against capping salaries in the private industry, but here we are speaking about managers in listed companies. It is limited in scope. It is about time that shareholders rights are respected and managers doesnt deserve many millions for their often poor work.

Sun, 03/03/2013 - 12:57 | 3295458 Ghordius
Ghordius's picture

wouln't be the first time socialist bs achieves nothing and it might yet start to be a societal change

Sun, 03/03/2013 - 16:27 | 3295844 HalinCA
HalinCA's picture

This has nothing to do with socialism.

Sun, 03/03/2013 - 17:49 | 3295977 swissaustrian
swissaustrian's picture

Of course it does, it interferes with shareholders property rights in the name "the health of the Swiss economy and the principles of sustainable corporate governance" It's a public intrusion into private affairs. It's gonna hurt the Swiss financial hub by driving IPOs, mergers and secondary listings out of Switzerland.

Sun, 03/03/2013 - 19:16 | 3296136 Urban Redneck
Urban Redneck's picture

It INCREASES the shareholders' property rights in listed firms, as shareholders currently are neither a party to management compensation contracts, nor have a veto over over them.  Management's freedom to enter into contracts "on behalf of shareholders" is being limited (and this wouldn't have come up or passed so easily if some of the largest firms hadn't entered into compensation contracts against shareholders' better interests , but there is nothing to stop the firms from 1) finding a mutually agreeable alternative 2) going private (which is relatively easy in a ZIRP environment, assuming the POS stock trades at a reasonable valuation) or 3) relocating to Banana Republic (the one I left could really use the tax revenue right now)...

At the end of the day, it's style over substance, since most of the listed firms are controlled by institutional shareholders, and to the few wannabe CEO's who can't convince other members of the club that they are worth the money they seek- good riddance.

If the commercial banks don't have the brainpower left in their Marketing departments to spin this positively and make money in the process, then they have cut too many heads, or hired too many Swiss ones to begin with.


Sun, 03/03/2013 - 19:41 | 3296170 swissaustrian
swissaustrian's picture

Sorry UR, you surely haven't read the text of the initiative. It limits the rights of shareholders. Here are the stupid provisions:

"organ and depot proxy voting [at general assemblys] is prohibited."

So you have to inform yourself about the date and issues of voting instead of beeing informed by your broker about this - that's not helpful for small shareholders.

"The members of the governing bodies will not be paid in advance, will receive no premium for acquisitions and sales, can not be an additional consultant or contractor to another company of the group, nor do they get any departure compensation. The management of the company cannot be delegated to a legal person."

These compensation matters are not left over to shareholders, they're made by the legislator. This takes away the right of shareholders to reward executives for certain achievements like a friendly takeover (which created shareholder value), it doesn't increase them. It also takes away the possibility of protecting companies from hostile takeovers by creating poison pills. What is gonna be the consequence? Fewer IPOs, fewer takeovers, fewer mergers, fewer secondary listings -> less jobs, less taxes, less capital inflows.

The fact that a legal person can't be named management is gonna hurt listed privat equity funds and REITs as well as a few holding companie. Many of these types of companies are structured like this for tax purposes. This too is gonna hurt shareholders as profits are gonna be lower.


Read the whole text (in English) here:

Imho, it's clearly the wrong method by which corruption and unwanted enrichement of executives is regulated. My solution would be such an antiquated thing as tort law, not restrictions on shareholder rights. Take Angelo Mozillo for example, he cashed out of Countrywide. He clearly violated shareholder rights intentionly. Why is nobody suing him under tort law?

Sun, 03/03/2013 - 21:55 | 3296506 Urban Redneck
Urban Redneck's picture

Based on my experience, the banning of proxies would be beneficial.  When I worked for a Fortune 500 bank in the US we would regulary meet with one-on-one with a handful of key institutional shareholders (especially if there were any controversial issues to be voted) to secure proxies before the shareholder meeting in order to minimize risk of undesireable outcomes, a by product of which. was that even if my boss made an ass of himself at the meeting and failed to advance a case for the desired vote, the outcome was guaranteed regardless of what anyone else wanted.  The new law arguably makes it harder for the smaller shareholders to effectively organize a voting block, but if management is always able to organize a larger voting block, I don't see the practical downside (outside of the perpetual growth and intrusion of the Federal government).

Poison pills as generally constructed, tend to benefit management at the expense of shareholders.  There is nothing that I read in the law that prevents the executive board from adopting share-based or non-C-Suite employee-based poison pills.  In fact if a hostile bidder is faced with paying 990 employees CHF 10,000 each vs paying 10 executives CHF 1M each, he is at least as likely, if not more so, to rethink his approach...

That said, the anti-federalist side of me despises the very notion of the law, but my experience leads me to believe that the bad apples will continue to rot at shareholder expense despite the best efforts of the electorate, the innovative and aggressive will continue succeed (which isn't necessarily a good fit in Switzerland), and the people who voted for this law on the basis of envy or the increasing divide between rich and poor will continue to be dissatified, since management is still free to fuck both their underlings and the tax authorities with 30% time (among a whole slew of other issues that would have made a larger difference to a larger number of residents, and perhaps a more appropriate referendum given the present underlying public sentiments).

Improvise, Adapt & Overcome (works for both good guys and bad guys)


Sun, 03/03/2013 - 12:36 | 3295422 resurger
resurger's picture


Sun, 03/03/2013 - 12:53 | 3295449 Arbysauce
Arbysauce's picture

gov: Give us your money. Obama has a sweet green energy scheme, some votes left to buy, and NEA pensions need topped up.
Me: no.
Gov: put your hands behind your back.

UnitedHealth: give us your money and we'll give you an insurance policy.
Me: no
Gov: then pay us a fine
Me: no
Gov: put your hands behind your back

Jobs: give us your money and we'll give you a cool new phone
Me: no
Jobs: ok

Sun, 03/03/2013 - 14:13 | 3295579 Kirk2NCC1701
Kirk2NCC1701's picture

It's astounding how many people simply take a position (usually pre-programed fro their youth),w/o thinking things through from basic principles.  Let's give it a shot, shall we?

1. Most people (with > 1/2 brain) will agree that a person's compensation should be tied to their performance and value to a group or company.

2. Even the dumbest (assholes) will have to agree how many hrs there are in a day and a year.

3. The output ('deliverables') of a business is based on the total output of its individuals

4. The 'value' that CEOs provide -- or allegedly provide -- is in what?  A: Vision, Values, Direction, Motivation, Public Speaking (with PR-scripted speeches) to motivate workers and staff, and speeches to motivate others to invest their fiat money in his company, and coordinating/managing his small group of EVP subordinates. 

5. Most rational people (with IQ > 90) will realize and admit, that in this context, that the quality of  'output' from a CEO in his functional role (#4 above) is NOT hundreds or thousands of times better than that of his subordinates.  If they ever listened to their speeches and processed them.

6. Everyone (even the sycophants) will have to admit to the basic arithmetic that a CEO's is not hundreds or thousands of times higher because they work 10x500 hrs/day, or their brain works 500x faster.

Put together these things, and you realize that if a CEO's compensation were based on the company's performance, that their comp-plan would be closer to the traditional 30-50x ratio.  Note also that these large ratios can and do occur only in large companies.  Note also that since the 1980s, about the time that fiat money started taking off, these ratios have risen from the historic 30-50x have climbed because of stock options and related bonuses.

What this means that modern CEOs are not paid these high multiples because of their "performance", but because of the company's "stock performance".  And that is a different story altogether:  an investor is investing in the company, not in the CEO -- of which he is essentially a small real contributor and a very large figurehead.

Modern CEOs have learned to build their comp-plan (bonuses) on stock price.  And you talk about things like fiat money and stock markets, well, that's a real kettle of fish to shoot in a barrel.

It would be nice, and we'd get similar outcomes to the Swiss, if US shareholders -- who are the actual payers of their salaries (due to stock performance), were able to vote on their compensation.  I for instance would not mind voting for, say, an Asian CEO -- who I know would "increase shareholder value" by working longer, work for less, and spend less time with the Wall St brokers or on golf courses. 

To give you a concrete example, w/o naming names (for obvious reasons), a Midwest aerospace company had to lay off several hundred people from its staff of tens of many thousands.  They did so rationally and fairly, it appeared.  The stock did not rise more than a percent or two.  Then, so first-hand reliable insider info goes, this respected CEO (1-2 years from retirement) got a call from a Wall St fund manager, who essentially insisted that another 2,000 be laid off.  That is exactly what happened.  The changing of the guard was announced, with younger stallions being positioned for his and other top jobs.  The stock rose > 20%.  Oh, BTW, I get many similar stories from EVP's and CEOs directly.

So, you see, in modern business and fiat money, stock-based companies and CEO's comp-plans are more about "stock price management" than ANYTHING else.

My shareholder value would increase if these glorified CON-men  -- with few exceptions -- would get paid less:  Smaller G&A means higher profits, which results in more taxes (we hope!) and better stock dividends or stock prices.

But, for those who just can't help themselves or are paid to shill, please do continue spouting your entertaining punchlines.  I need a good laugh (at you, not with you).

Sun, 03/03/2013 - 14:13 | 3295581 gaillard111
gaillard111's picture

This short notice frome switzerland.

Don't forget that our economy is very "conservative" and cautious. But above all we are the burrow of 2 of the to big to fail (UBS & Credit Suisse). Every body is well aware of  that here. So we have both feelings : injustice... and fear... waiting for the system collapse...  or go real under under. May we have given some kind of model to follow.

Sun, 03/03/2013 - 15:59 | 3295790 max2205
max2205's picture

It's stupid crazy. Who makes a million or more a month?

I am for a cap of $1 mm per year. And no stock options. It's just gross

Sun, 03/03/2013 - 16:16 | 3295819 Kirk2NCC1701
Kirk2NCC1701's picture

It should also be pointed out (unless I missed it) that these lop-sided 500:1 ratios typically do not occur in companies that actual make things, where they have an army of scientists, engineers and skilled technical workers, but in companies in the Service industry (paper pushers).

We all know that the Service industry has all the smart guys and sliest operators at the very top, and below them is a veritable army of low-paid and lower-skilled clerical and administrative minions.  Sad, but true.

My advice:  1. If you must work for others, be a top-tier player in the Service industry, or get the skills to be a high-level player in the Tech industry.  2.  Get involved in shareholder events and lobby for rational exec comp-plans that are on this side of reality.

As a former fellow-exec (now retired) once put it:  "More than anything else, the problem with America in the last 25 years is corporate governance.  It has been compromised and corrupted.  Everything else, all other BS flows downhill from these Board rooms."

Sun, 03/03/2013 - 16:25 | 3295842 HalinCA
HalinCA's picture

As Alcuin wrote Charlemagne in 798:  Nec audiendi qui solent dicere, Vox populi, vox Dei, quum tumultuositas vulgi semper insaniae proxima sit.


Except in this case, the populi are correct.

Sun, 03/03/2013 - 18:25 | 3296040 granolageek
granolageek's picture

The family that owned King Arthur Flour for 150 years died out, and left the company to the employees.


I have it on very good authority that one of the biggest perks of being an owner is getting chance to respond to a tender offer with. "not only no, but hell no."


Oh yeah, they are minting money. Way more than the family ever did.

Sun, 03/03/2013 - 18:32 | 3296054 Walt D.
Walt D.'s picture

The CEO of UnitedHeathCare is taking home chump-change. He helped write ObamaCare - a handout from the goverment that is worth TRILLIONS of DOLLARS.

Back in 80's Michael Milken made $550 million in a single year.

The sad reality is that today, for large corporations , making money is as simple as having lobbyist clout in Washington. It has probably always been this way. When you look at the summer mansions in Newport, RI, many of the owners made their fortunes through business with the Federal Government.

Time for a new Mel Brooks play - "Spring Time for Obama - How to Produce a Green Energy Flop"

Sun, 03/03/2013 - 19:35 | 3296161 alentia
alentia's picture

Before anyone complains, they need to replace current CEO with end of the chain worker and see how company performs after a year or two. If company lost money, all union employees will share the loss embedded at 100% in their salaries. 


The most likely outcome each union employee will end up in triple digit debt, so they will cry wolf to get back former CEO so at least they can get their salaries back.

Sun, 03/03/2013 - 22:21 | 3296587 IamtheREALmario
IamtheREALmario's picture

Fortunately fopr the US cabal of fat cat parasites, nothing so heinous could ever pass here. The US os far too corrupt and US execs are far too self centered.

Sun, 03/03/2013 - 23:55 | 3296832 Totentänzerlied
Totentänzerlied's picture

Forward Soviet!

Mon, 03/04/2013 - 03:16 | 3297081 Lord Koos
Lord Koos's picture

70% in agreement is not polarized.  50/50 is polarized.

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