You’ve got to love those Swiss people.

Not only have they figured out how not to engage in endless senseless wars and still keep their economy humming right along, they know what to do about something we Americans just complain about — those obscene salaries and bonuses corporate CEOs and their assistants command, often at the expense of the stockholders.

Incensed by revelations of how much the leaders of many international corporations headquartered in Switzerland were being paid and especially the multi-million-dollar “golden parachutes” they received when they were let go, the Swiss people took matters into their own hands.

Because the Swiss have a direct democracy that includes the “initiative,” which gives the people the power to propose and vote on their own laws, Switzerland now has the world’s most severe restrictions on executive compensation. After 100,000 signatures were collected to get what was called the “fat cat initiative” on the ballot, the people overwhelmingly passed it on March 3. It should be noted that while Switzerland may be a small country, it’s home to some huge corporations, ranging from the big bank UBS to Nestle.

The new law gives shareholders of companies listed in Switzerland a binding say on the overall pay packages for executives and directors. In addition, companies are no longer allowed to give bonuses to executives joining or leaving the business or to executives when their company is taken over. Violations could lead to fines up to six times an executive’s annual salary.

I got a chance to get some details about the initiative when Beth Zurbuchen, the former Channel 3 news anchor who is now the president of the Swiss Center of North America in New Glarus, brought veteran Swiss journalist Peter Schibli to the office this week. We talked about the “fat cat” law and a host of other topics, ranging from Swiss health care to Swiss tennis great Roger Federer.

Schibli, who was assigned to Germany just before the Berlin Wall came down and was based in Washington during five years of the Bill Clinton administration, is currently the director of “swissinfo.ch,” the international branch of the Swiss Broadcasting Corp., roughly the equivalent of our public broadcasting system. Schibli and his staff distribute news from Switzerland to countries around the world in 10 different languages, all on the Internet.

A pleasant and engaging journalist, he was in the United States the past three weeks on a sabbatical that took him to Washington, D.C, to renew some memories, west to Arizona “to find some warmth,” and, of course, to Monroe and New Glarus to visit the American Swiss. Monroe has been trying to form a sister city relationship with a Swiss city and Schibli, who was put in contact with Monroe folks by Zurbuchen last year, has been helping out. It appears that the Swiss Cheese Capital of the U.S., Monroe, will now soon be the sister city of Langnau im Emmental, which is quite appropriate since Emmentaler — Swiss — cheese originated there.

Schibli and I shared some of the concerns we have with the media today. Dwindling resources for newspapers, magazines and other media that have traditionally covered the news is dangerous for the future of democracy, he said. If people don’t get adequately informed, then how can they make decisions required of them by a democracy?

The “fat cat” initiative tapped into the people’s understandable outrage over unlimited pay and bonuses for the big boys but, Schibli noted, they need to temper some of the restrictions to make sure they don’t prevent Swiss-based corporations from competing for talent. U.S. corporations, for instance, are out of control with CEO pay. So why would an executive consider a Swiss job over one in the United States, where they can make tens of millions even if they drive the corporation into bankruptcy? Interesting thoughts, but I still like that the Swiss people did something our own regulators and politicians are afraid to do here.

Schibli documented his three-week trip for the people back home with a blog he called “My Journey West.” It’s full of pictures and interviews of his trip, including his visit with me. It can be accessed at http://myjourneywest.wordpress.com/

Dave Zweifel is editor emeritus of The Capital Times. dzweifel@madison.com

Dave is editor emeritus of The Capital Times.

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(13) comments

toobad
toobad

The Swiss don't let illegals vote or get welfare either AND EVERYONE HAS A GUN!!! Also, the Swiss don't kill foreigners in other countries with Drones like 0bama does.

patricko
patricko

When it comes to Dave's problem with "obscene" compensation, it's always the CEO's specifically (except Warren Buffet, of course.) For some reason there is never any outrage over similar compensation being recieved by an Oprah Winfrey, Aaron Rodgers or Kobe Bryant. For some reason generating big bucks in sports or entertainment seems more legitimate than through a capitalist venture.

webmasterbigbrother
webmasterbigbrother

dave found another marxist play with! bet the both say "fatcat" in a scary bad guy voice. Go class conflict!

can you imagine anything more silly then thinking you are doing something noble restricting ceo pay?

everclear
everclear

Oh really, United Health care has had two CEO's who both got over 1 Billion for 12 months on the job. The one in 2005 got 1.7 Billion. So they make more going to the bathroom just once than you make in a year. It takes about 400,000 policy holders to pay their salary. I guess you don't pay for you insurance.

tomtom33
tomtom33

I know nothing about United Health Care, and I doubt that you do either. My guess is that, if they were not worth the money, they would have been paid less. That's how the marketplace works.

bookman21
bookman21

The marketplace worked wonderfully in 2008 when the bankster's unbridled avarice threw us all under the bus.

everclear
everclear

Ron Johnson the CEO for J C Penny was offered 50 million to sign on. He did, and he crashed the company in 17 months. Time for you to quite kissing the butt's of everyone that has CEO in front of their name, Tom

tomtom33
tomtom33

I can cite bad examples of nearly anything. Those examples prove nothing. Was Jack Welch worth what he was paid? Steve Jobs? Bill Gates? Warren Buffett?

Conversely, the CEO of Solydra was not worth the money.

tomtom33
tomtom33

Have you seen Buffett's recent tax returns? When your net worth is north of $10 billion, you tend to make a dollar or two in other income. I would be willing to bet that the United Health Care CEO did not get $1 billion as a salary. Stock options and performance bonuses figured in there - just like Buffett.

I thought that Romney pioneered outsourcing. Actually outsourcing came along well before Welch. Welch provided great value for his compensation. He tremendously increased the value of GE stock. That helped the retirement portfolios of many people including me and WRS. Now Welch is responsible for child labor laws in every country in the world?

Retoother
Retoother

Add to that........the Swiss do not allow immigration either..........you can visit but cannot stay. They also have some strict rules over there for unemployment and govt assistance.

lenlen
lenlen

You have provided very little detail on the new Swiss law and how it differs from laws in place in the EU and the non binding shareholder voting requirement on executive pay in most of the US corporations to date. Those "outrageous" US CEO compensations are voted by shareholders and BODs now. The EU is proposing that CEO pay be a limit ratio to the lowest paid employee. Since the EU and Swiss have higher minimums for their lowest paid worker (waiters/waitresses are paid a living wage and go through apprenticeship, for example) as compared to the Wal-marts, McDonalds, etc in the US. the executive ceiling is far more fair

tomtom33
tomtom33

If you are prevented from paying market rates for CEOs, you cannot compete. If you can't compete, you go out of business or leave Switzerland. Of course the Swiss don't seem to need the money or the jobs.

sebastian
sebastian

Not to defend ceo pay, but what do you consider extreme?

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