My Executive


    Nov 21, 2013

    Should boss' pay be linked to the cleaner's?

    SWITZERLAND will vote on Sunday on whether to limit the salaries of top executives so they don't earn more in a month than the lowest-paid workers earn in a year, a move that could mean big pay cuts for business leaders earning millions.

    The so-called 1:12 initiative for Fair Pay, the latest attempt to narrow a growing wage gap in one of the world's wealthiest nations, was brought about by the youth wing of the Social Democrats (Juso), who gathered the 100,000 signatures needed to force a nationwide vote.

    Despite its high standard of living, Switzerland is a generally egalitarian country, increasingly unhappy with rising wealth inequality as wages of executives balloon, while those of low-skilled workers lag.

    "After the Second World War, the growth of salaries and wealth was more or less parallel," Juso president David Roth told Reuters. "In the last 10 years, one small part of society took the big profits and the majority...had less in their pockets."

    In 2010, the 10 per cent of the workforce with the lowest salaries earned just under 4,000 Swiss francs (S$5,460) per month, according to the Swiss Trade Unions Association. That suggests that top earners' wages would be capped at around 576,000 francs (S$786,600) a year if the referendum passes.

    The 1:12 campaign has not only made executives jittery. Managers of Swiss soccer clubs have also gone public with concerns about how to attract and retain top talent.

    "Switzerland is not an island," Mr Andre Dose, chairman of the Grasshoppers club in Zurich, told the Schweiz am Sonntag paper. "If clubs can't pay the best Swiss players market rates, they will transfer abroad even earlier."