Swiss vote Yes to curb top executives pay

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This Sunday, 3rd March, Swiss voters, by a whopping majority of by 68%, struck fear into the corporate world by backing a citizen’s initiative referendum to curb top executives pay. Over two-thirds of the citizenry backed a package of proposals including a ban on “golden hellos” and “golden parachutes”, making shareholder votes on pay binding on corporate boards, requiring yearly term limits to board membership and requiring pension fund shareholder votes to be transparent, along with jail terms for executives that break the rules. The citizen’s initiative passed against the background of vocal screeching from the united ranks of the corporate elite, Switzerland’s largest multinationals including Nestlé, Credit Suisse, Novartis, ABB and nearly all the political parties.

 

Since the onset of the crisis in 2008 and number of highly public corporate disasters, starting with the bankruptcy of the largest Swiss bank, UBS, in the sub-prime mortgage debt bust, and its subsequent bailout by the state, together with continued paying of obscene bonuses and “compensation” to the bungling leeches responsible, has raised popular ire. Following the lead set by bankers and corporate bloodsuckers throughout Europe and North America, the Swiss business elite have felt themselves free to ignore the fury of the general population. To the extent that a mere two weeks before yesterday’s referendum, the ex-head of Swiss multinational pharma giant Novartis was offered a “golden handshake” of €78m as “compensation” for being sacked for incompetence and corruption. Too late the business community realised that the resulting outrage could be fatal to their hopes of defeating the referendum. Despite belated panicked messages from Daniel Vasella, the parasite in question, first that he intended to donate his ill-gotten loot to charity, then when that didn’t work, foregoing the obscene payout altogether, the damage was done. Yesterday’s 68% is the highest approval rate for a citizen’s initiative referendum in Swiss history.

Unlike the EU or any country within it, Switzerland has, for historical reasons, a uniquely democratic constitution with elements of direct democracy that require most acts of federal government to be subjected to referenda of the citizenry, and allow citizen’s initiative proposals to be put to referendum in the same way and, in theory, to then have the same force of law as any government act. In practice, as the system is not full direct democracy, the new “fat cat pay initiative” as it has become popularly known, will have to pass through the sticky paws of government bureaucrats and lawyers on its way to being implemented. The business lobby will thus have a second bite at the cherry to undermine the implementation of the new law by institutional ambush and bureaucratic maneuver.

Yet the extent to which the political establishment actually dare push back this way, in the face of popular anger, remains to be seen. Switzerland is by no means a left-wing or liberal country and the initiative itself is the creation not of some wild-eyed communist, but a pissed-off businessman, Thomas Minder. Minder’s business was originally ruined in 2001 when Swissair went belly-up, due mainly to the heroic incompetence of its management. It was the subsequent huge payoff to the complacent and corrupt Swissair management that convinced Minder to not just get mad, but to get even.

This referendum takes place against a background where the EU has just approved a measure to limit bankers’ bonuses to a limit of their annual pay, with an option for two times pay, in exceptional circumstances. Despite the wails and howls of anguish from the City of London and their vicars on earth, the UK Tory party, this measure is in reality little more than populist window dressing combined with a small element of minor but genuine irritation from the political establishment, not so much for creating the economic mess, (in reality the true systemic causes of the breakdown go far wider than “greedy bankers”), but for having the appallingly bad PR and political sense of “optics” in persistently rubbing the electorate’s noses in their unrepentant rapacity.

Anti-capitalists need to examine the meaning of the Swiss “anti-fat cat” referendum carefully. This is not an anti-capitalist initiative, nor even a “transitional” demand. Thomas Minder and most of his Swiss supporters led a moral crusade in defence of a “Mittelstand” capitalism, compatible with the “general interest”, against the very public excesses of a grotesque mega-corporate elite, rendered arrogant and hubristic by their isolation from ordinary economic realities. The dismay of this elite in face of their temporary public shaming, may warm our hearts with a little flicker of the bale-fire of schadenfreude. But we should not let that blind us from the reality that the ultimate goal of the “progressive” factions of the business class, is always progress towards more capitalism, never less.

In that light, what should give us even more pause for thought is that a certain portion of the self-declaredly “anti-capitalist” European left, in their flailing for populist programmes and tactical alliances with the so-called “progressive bourgeoisie” are coming out with propositions indistinguishable from those of Thomas Minder and other campaigners for a “fair and sustainable” renewed capitalism. In the wake of yesterday’s referendum the centre-left Swiss Social Democrats are calling for tougher laws to restrict annual compensation (including pay, bonuses and perks) for top managers to be limited to 12 times that of their lowest-paid workers. But this shouldn’t be mistaken for an incremental step towards socialism either. Like Shakespeare’s Mark Anthony, they really come to praise capitalism, not to bury it.

WORDS: Paul B IMAGE: Andrew Flood

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