Switzerland Clamps Down Hard On Executive Pay — Should The U.S. Follow Suit?

[ProSense]

Switzerland Clamps Down Hard On Executive Pay — Should The U.S. Follow Suit?

By Pat Garofalo

Yesterday, voters in Switzerland overwhelmingly approved new measures to clamp down on executive pay. Under the approved referendum — which means that the new provisions will be added to the Swiss constitution — shareholders will have the ability to veto executive pay packages, so-called “golden parachutes” will be outlawed, and executives who defy the rules could see jail time. As the Wall Street Journal’s Andrew Peaple wrote, “Swiss voters’ anger is understandable. Like other countries, it has seen executive pay rise out of all proportion over the past decade”:

Switzerland has the highest remuneration per board member in Europe, according to Deloitte. Pharmaceutical company Novartis’s recent offer of a six-year $76 million golden parachute to outgoing Chairman Daniel Vasella is the latest example of seemingly egregious rewards. UBS Chairman Axel Weber was paid $5.3 million when he joined the bank this year. Compared with Swiss average wage of $73,500, such payments look out of whack.

The European Union has also approved new restrictions on bonuses at large financial firms.

Many of the same problems that led to Swiss frustration with CEO pay apply here in the U.S. For instance, Citigroup CEO Vikram Pandit walked off with millions of dollars after vaporizing most of his company’s value. Duke Energy paid its former CEO $44 million for working literally one day.

Skyrocketing executive pay (along with growing pay in the finance industry) is a huge component in America’s growing income inequality. In fact, “Executives, and workers in finance, accounted for 58 percent of the expansion of income for the top 1 percent and 67 percent of the increase in income for the top 0.1 percent from 1979 to 2005.” Special tax deductions for executive pay cost taxpayers billions of dollars per year.

In the Dodd-Frank Wall Street reform law, shareholders of U.S. corporations were also given new powers meant to rein in executive pay. However, Dodd-Frank only gives shareholders a non-binding vote, meaning that the corporation is able to essentially ignore it.

- more -

http://thinkprogress.org/economy/2013/03/04/1666781/switzerland-executive-pay/

It should have been binding, but at least the non-bidning can have an impact.

Teamsters Applaud SEC's Navistar Decision Upholding Dodd-Frank
http://www.teamster.org/content/teamsters-applaud-secs-navistar-decision-upholding-dodd-frank

<...>

The Teamsters filed the same proposal at Coca-Cola Enterprises, which petitioned the SEC for no-action to omit the golden parachutes proposal from their proxy materials based on the initial Navistar decision, says Louis Malizia, assistant director in the Teamsters Capital Strategies Department. “We are confident the SEC will follow its reversal on Navistar and not grant CCE no-action,” Malizia says.

http://www.complianceweek.com/sec-staff-reverses-ruling-on-teamsters-proposal/article/193829/

Capping CEO pay will do a lot to address the excessive concentration of growth in income at the top (http://www.democraticunderground.com/10022457480), but unless pay at the bottom changes, low-income workers are not going to see their wages go up.

Two Democrats To Introduce Bill Raising The Minimum Wage Above $10

By Travis Waldron

Two Democrats plan to introduce legislation today that would raise the federal minimum wage to $10.10 an hour, more than a dollar over the proposal President Obama made during February’s State of the Union address. The current minimum wage is $7.25 an hour and has not been raised since 2009 as part of legislation signed by President George W. Bush.

The legislation backed by Iowa Sen. Tom Harkin (D) and California Rep. George Miller (D) would, like Obama’s proposal, index the minimum wage to inflation so that it keeps up with the cost of living over time. Harkin and Miller told the Huffington Post that raising the minimum wage was “a matter of justice” for low-income workers:

“When you see what’s happened to CEO salaries and compensation since the 1970s, and what’s happened to the minimum wage, it’s just startling,” Harkin said. “We can’t continue on this way. We need a higher minimum wage.”

“People do see the minimum wage as a matter of justice for people who don’t have the ability to bargain for decent wages,” Miller said. “And that’s all this is — it’s a minimum wage. Nobody’s walking away from here rich.”

As Harkin noted, executive salaries have skyrocketed over the last three decades, rising 127 times faster than worker pay. Corporate profits have also risen to record levels, but the minimum wage hasn’t kept up, even as low-wage jobs are becoming more prevalent after the Great Recession. The minimum wage reached its peak buying power in 1968; to equal that buying power today, it would have to be $9.92 an hour. Had it been indexed to inflation in 1968, it would be $10.40 an hour today.

- more -

http://thinkprogress.org/economy/2013/03/05/1673141/harkin-miller-minimum-wage/

[99Forever]

1. Bwahahahahhahahahhahha....

... yeah, like that's gonna happen.




Thanks for the laugh.

[ProSense]

3. Does this

"Bwahahahahhahahahhahha.... yeah, like that's gonna happen."

...mean you think it's a good idea?

I mean, this happened:

Teamsters Applaud SEC's Navistar Decision Upholding Dodd-Frank
http://www.teamster.org/content/teamsters-applaud-secs-navistar-decision-upholding-dodd-frank

The Swiss solution may not happen now, but the fact is change happens. It's not impossible, and it will require strong advocacy.

[99Forever]

4. Oh please.

We not only don't rein the Greed Meisters in, nor do we even try to prosecute the worst of them, we put them in positions of authority in the administration and "look forward."

I think unicorns are a good idea, but I've yet to see a real one.

[ProSense]

5. I'm really

"We not only don't rein the Greed Meisters in, nor do we even try to prosecute the worst of them, we put them in positions of authority in the administration and "look forward."

I think unicorns are a good idea, but I've yet to see a real one."

...liking the doom in your response. How does it feel to be sitting around waiting for the inevitable destruction of the country?

I mean, one would believe the country is worse off now than it has ever been.

FYI: America's problems predate 2009, and President Obama is working to improve the country.
http://www.democraticunderground.com/10022461547

[99Forever]

8. That's it...

..change the subject.

[ProSense]

9. Alert

"That's it...change the subject. "

...red herring.

[99Forever]

10. It's what you do.

You can't help but make it personal. I've watched you do it hundreds of times. Now, have the last word, something else you can't seem to pass up.

[ProSense]

12. What a bunch of

"It's what you do. You can't help but make it personal. I've watched you do it hundreds of times. Now, have the last word, something else you can't seem to pass up. "

...ironic nonsense. You can't defend your points so you build strawmen. The funny thing is look at what you've decided to build it on: claiming your point is a red herring is makes "it personal"?

[liberal_at_heart]

2. we should but we won't

[randome]

6. We also didn't thnk the GOP would be in the shape they're in today.

Things are changing.

[valiberal26]

7. This is a very good idea.

The concept of a 'poverty-line' is well accepted as the point below which your income, or lack thereof, qualifies you as 'poor'. In times like these, perhaps we ought to establish a 'wealth-line'; income above which qualifies you as rich. Those living below the poverty-line in theory qualify for extra assistance, for food, shelter, medical aid, etc. Perhaps with this wealth-line, we could draw a line at which you no longer get to keep your extra income.

See where I'm going with this is... Most people can live decently enough on around $40,000 a year. You won't have everything you want, but you'll have a few luxuries; and you should be able to take care of yourself and your family if you manage your money right. Depending on where you live in the country and the associated cost of living could change that amount considerably, but forty thousand a year is a decent example.

Perhaps instead of just limiting the income of upper management, with this debt the government is accumulating and the spending cuts now in effect... Perhaps its time to limit everyone's income. I won't begrudge anybody a decent living; but nobody needs to earn more than enough to live a comfortable life. Nobody needs a $250,000 a year income, or a $90,000, or even a $70,000 income. Not if we're tossing children out of Head Start, not while teachers are facing lay-offs, and essential services are being cut.

Those making obscene amounts of wealth need to have that trimmed. Make your $40,000 a year but anything above that goes right to the government to provide for the general welfare. It doesn't matter if you're getting that money by working, investing, or inheritance. If you get more than $40,000 a year, then the excess ought to go to pay for the services our society is built upon.

[marions ghost]

11. bad smell in here

[valiberal26]

13. That smell...

Is the smell of true equality. A new dawn if you will.

No more rich, no more poor, everybody shall be equal. It's all part of my plan to reform our dying, failing republic.

[marions ghost]

15. Oh sure

& what fantasy novel would that be?

The failing part I agree with. Plan bogus. failing And it's clear, so oh yeah oopsy flops a new dawn hee haw

[valiberal26]

18. What do you disagree with exactly?

What I'd really like to see is both a reduction in how much 'take home' pay the rich get to keep; and yes I consider $40,000+ to be rich. All that extra money out there could pay for so many essential services that the Government cannot afford to keep providing.

Even better if we could allow the government to confiscate all that wealth just sitting idle in bank accounts across the nation. We could wipe out the deficit in a matter of years, and still provide for the general welfare. All that wealth, all those trillions of dollars could do so much more for the people than for a mere 1% of the population.

Wouldn't you like to earn as much as Bill Gates or Warren Buffet? Have the same lifestyle as they do? Sure they'd have a lot less to work with, but it's a matter of equality. That is what this nation was founded on, not the senseless accumulation of wealth.

[marions ghost]

20. Like I said

in what fantasy novel did you read this? Where is there a place with people so honest, trusting and naive that
they would believe, in or buy into, such a "system"? Do you also have sinkhole land in Florida to sell to bleeding heart liberals & socialists?

so funny.

[truebluegreen]

14. YES.

But as IF.

[marions ghost]

16. The US should follow suit

but that would be if the US govt worked for the people. We are so far from that it's got me laughing. But thanx for posting. We need to know about life in the enlightened world.

[moondust]

17. "1 to 12 Initiative" is the big one.

http://www.democraticunderground.com/10022453075#post1

Should have been done 40 years ago.

[ProSense]

23. Interesting. n/t

[Aerows]

19. Yes - with reservations.

If you run a publicly traded, shareholder owned company, yes. If you run a privately owned company, no.

A privately run company is the distilled American dream. A publicly owned company, i.e. taken IPO, etc. is nothing like that.

[Initech]

21. They should vote to keep our executive money out of their country next.

[marions ghost]

22. +++++

Yeah. That thought was floating in my head, but you snagged it.

Now that would really be enlightened.