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/