Swiss reject pay curb on executives

PUBLISHED : Monday, 25 November, 2013, 2:43am
UPDATED : Monday, 25 November, 2013, 2:43am

Two-thirds of Swiss voters yesterday rejected a referendum to cap executive pay at 12 times the wage of a firm's lowest earner, according to provisional results.

The measure had been expected to fail, but the debate has tapped into a vein of discontent among Swiss voters, who in March backed rules to rein in golden handshakes, in the wake of high-profile exit payments to top bosses.

Dubbed the "1:12" initiative after the legally binding ratio it would set between the top and bottom salaries in a firm, the plan met stiff opposition from Switzerland's business community and political right.

Ahead of the vote, its critics issued stark warnings that inscribing salary restrictions into the law would make the wealthy Alpine nation less competitive and break with a Swiss tradition of limited official meddling in business.

"There's a climate of mistrust towards those who make money," Jean-Claude Biver, boss of high-end watchmaker Hublot, told the Swiss daily Le Temps.

Christoph Darbellay, head of the centre-right Christian Democratic Party, said he could understand disquiet over "undeserved salaries".

But voting Yes would be tantamount to "shooting ourselves in the foot", he insisted.

Switzerland's cross-party government had urged a No vote, saying a 1:12 law would dent tax revenues and scare off foreign firms.

Switzerland, which has long boasted a business-friendly climate coupled with one of the highest average salaries in the world, has largely avoided the economic crisis dogging the European Union, of which it is a staunch non-member.

The referendum campaign was spearheaded by the Socialist Party, Greens and trade unions.

They rejected the criticism, arguing it was time to clip the wings of the vastly overpaid, and underlining that an informal ratio of around 1:12 was the norm as late as 1998.

The debate led to intense scrutiny of bosses' pay packets, which the 1:12 proponents said were an average 43 times higher in 2011 than those on the bottom of the ladder. Campaigners said the then boss of pharmaceutical giant Novartis made 219 times the lowest salary last year.