Voters in Switzerland took to the polls on Sunday, and in a two-thirds majority, to reject a proposal that would cap top executive salaries at 12 times the rate of the lowest, average worker’s salary. The votes against reached 65.3 percent.
It was expected beforehand that the proposal would fail, despite the fact that there is widespread discontent among workers about the excessive salaries of the top earners. The plan was met by Switzerland’s political right and its business community with major opposition.
The move was named the “1:12 initiative,” using the ratio that was proposed between the highest and lowest earnings in a company.
Before the referendum, critics gave strong warnings, stating that by imposing salary restrictions in this manner, it would make Switzerland less competitive. It would further break away from the tradition in the country of little meddling by government in business.
Back in March, people of Switzerland were, however, definitely in favor of reining in the famous “golden handshakes” after there was a huge outcry amongst the Swiss public over high-profile once-off severance payments.
The Swiss government had pushed for a No vote, saying that the legislation would damage tax revenues and would also scare away investment from foreign companies.
Christoph Darbellay of the center-ridge Christian Democratic Party told the media that while he could understand people getting upset over what he called “undeserved salaries”, voting Yes to 1:12 would have been pretty much the same as “shooting ourselves in the foot.”
What happened was that the votes made in Switzerland went to reject bid to cap excessive executive salaries, with 65.3 percent of voters across the country rejecting the initiative.
Economic Affairs Minister, Johann Schneider-Ammann, was happy with the result, saying that it would keep the country’s economy at competitive levels, but he did urge bis bosses to note the public outcry over some of the larger salaries received, saying that he did not appreciate that fact that a handful of managers were earning such excessive salaries.
Switzerland has always been renowned as offering a climate which is open to business, along with offering some of the highest salaries in the world. The country has also for the most part had not been hit by the economic crisis which has affected the majority of the European Union. Switzerland is not part of that union, for which they might possibly be thankful.
The I:12 referendum campaign was the brainchild of the Socialist Party’s youth wing, along with the Greens and the Swiss trade unions. According to them some managers are vastly overpaid and that in 2011 salaries were seen to be 43 times higher on average than those on a lesser salary scale.
Campaigners stated that in 2012, the-then head of the major pharmaceutical company, Novartis made around 219 times that of the lowest-paid salary earner in the company. UBS bank employees at the bottom of the scale, would have to work for approximately 194 years to make the equivalent amount that the head of the bank made in a mere 12 months.
However, despite their efforts David Roth, chief of the Swiss Socialist Youth said that they had not managed to persuade people that the ” rip-off going on in companies’ executive circles must end.”
This was not the only popular referendum to be shot down in flames on Sunday, as another initiative, proposed by the Swiss People’s Party, would have offered tax breaks to families in which one parent stayed home with the children rather than sending them out to daycare facilities.
In the meantime executive salaries will continue as the majority of the country rejects the bid to cap these earnings as Switzerland votes on the referendum.
By Anne Sewell