An interesting article appeared on the Swiss Info feed today, releasing figures showing management and executive wages in Switzerland are skyrocketing, while workers struggle for even modest increases. The full article is here:

http://www.swissinfo.org/eng/front/d...05&sid=7960358

How can these enormous salaries be justified? And if bosses get increases, aren't the workers entitled to something similar? Should there be some kind or regulation or limitation on executive remuneration?

Please discuss...

What's the difference, the Swiss government eventually takes the money away from high paid CEOs with huge taxes.

Plus the CEOs are earning their money/customers and market from outside Switzerland not from inside. Statistics may not consider this. also many "CEO" are foreigners and bring with them foreign accounts and money.

If they dont get paid well they will leave switzerland, with their money and customers... USA or Monaco perhaps...

am sure we are all aware, it is not just in Switzerland ... I am always amazed that shareholders let this go on, although in a large part, I am sure the institutional investors work hand in hand with the remuneration committees of large quoted companies.

Here is an article from the Economist:

http://www.economist.com/business/di...ory_id=9370567

It does appear one Swiss shareholder is taking matters into his own hands. I hope his petition is successful.

Limpwristed Pinko Commie! As John Wayne would undoubtably have said

Whatever the issues of fairness concerning pay, I find it grossly unfair that mega-bucks earners often pay a smaller percentage of their salary in tax than the cleaning ladies of the same company. How does that work? But since when has fairness been relevent?

good article Speed & I wish him every success ... just wish someone had been doing this in the UK when Graham Wallace & his merry cohorts ripped C&W blind about 5 years ago ....

from The Times :

"the Treasury agreed special terms with the private equity industry in 2003, which mean that the “carry” on a deal – i.e. the partners’ profits on an investment – can be taxed at just 10 per cent. The partners have to have held the investment for two years and employ taper relief, but the fact is that Mr Ferguson is right: it is possible that buyout executives can end up paying an even lower rate of tax on a multimillion-pound payout than a cleaning lady pays on a minimum wage salary."

they also ran an article on Sunday to show normal mortals how they can take advantage of this loophole as well .....

"Expecting the world to treat you fairly because you are a good person is a little like expecting the bull not to attack you because you are a vegetarian."

I don't envy rich people.

I think you have to distinguish between normal companies, which is the origin of this thread, and the special circumstances of the private equity companies in the UK. There’s another thread about this - Zero Tax for the Super Rich in the UK. The UK private equity companies are using non-resident or non-domicile status or diverting their earnings to offshore trusts.

As for the normal companies I think you have to consider each case individually. I inherited some shares in a company that was not doing well. A new CEO took over and turned it around. My dividends increased as did the value of my investment and I was not at all unhappy that he got, or rather earned, a very large reward via stock options. OK he got millions but it was only a tiny percentage of the wealth he had created.
It all very well saying lets restrict their earnings but what happens then if your companies cannot attract the best management ! Is this good for the ecomony ?

My point is that at C&W the management pursued a crazy strategy with no checks on them at all from the share holders & then exited with a lot of cash on golden parachutes when it all went tits.
Taper relief is available not just for private equity partners, but to a wide variety of investor, see last issue of Sunday Times.
I have no issue with a succesful CEO that performs being financially rewarded, however it seems as though today executive remuneration is a "droit de seigneur" rather than based on capabilities & returns .....

I agree with you.
Is the answer government intervention though as, more often than not, it seems to end up with the opposite effect to that intended !

Government involvement should be the last resort in my opinion, but if quoted companies are not prepared to self-regulate, then I think that a neutral ombudsman will be put in place. From the ABI -

"The Association of British Insurers issued their updated Principals and Guidelines on Remuneration. The updated guidelines called on remuneration committees to step up their scrutiny of pay programs and, in particular, to be more thoughtful in identifying the drivers of shareholder value when linking pay to performance."

Classic quote! Trebles all round, oh, and thanks to the galley slaves for rowing so strongly...

The taxes in Switzerland are not "huge" (high). Regressive / degressive taxation was just ruled unconstitutional, true, but are taxes in this country really that "discriminatory" against the wealthy? I had thought that they attracted wealthy individuals (and corporations) with a myriad of tax incentives and a relatively-low top bracket (dependent upon the canton, true).

You’re mixing a lot of different things together. There are rich people who come to live here, such as Ralph Schumacher, but who do not work within Switzerland and they can get very attractive tax rates compared with other countries. This is subject to negotiation with the canton. (The digressive taxation decision is being appealed).
Tax incentives may be offered to companies who want to relocate but not to individuals. We’re discussing bosses so let’s ignore rich people and companies.

The tax a CEO would pay varies by canton and, from what I understand, the rate here is attractive, but not the lowest, on an international level. See also this thread: Zero Tax for the Super Rich in the UK.

As to whether a tax is high (or huge) I suppose depends on whether you’re paying it, or receiving it, and compared to what ? A tax may ‘only’ be 35% but if it’s 35% of ten million francs that’s CHF 3,500,000. (This is one reason I’ve decided not to offer my services to a company for ten millions francs a year, I just couldn’t bear to pay that amount of tax every year !)

Now, if you really want to know what a truly huge tax rate is, try this : UK, 1973, tax on investment income over £20,000 (CHF 50,000) = 98%. Funny thing was that when they tried to collect it most of the rich had left the country !

I thought that it was (*only*) the SVP that was trying to find enough support for a referendum to alter the constitution in order to support regressive taxation? The FDP even opposes the SVP's referendum attempt. Wealthy individuals are also offered packages in many cantons, especially in the German-speaking area.

First of all, I stated that tax varies by canton. Next: I am sorry, but tax in English is typically characterized as high, not "huge." This reminds me of comments I heard from a certain family member when I was back in the United States: Who is wealthy? What tax rate is "just"? I never posted those questions then, nor will I now. Why? Because federal tax in Switzerland is very different than in the US. Federal tax in Switzerland is not 35% -- am I missing something? Almost all *federal* revenues in Switzerland are based upon the VAT! I also know what a high tax rate is -- I am American. I know what a confiscatory rate is -- it just doesn't exist in Switzerland! Tax rates are generally lower than in the US and UK -- unless I am really missing out on something. I look forward to someone showing me otherwise -- everyone tends to do it.

Whatever then, eh? Enjoy the ten million francs a year that you must save in taxes then -- I don't care.

Personally i don't care about Rich CEO's getting paid more. if the shareholders dont like it they dont have to pay them. and if the employees think its unfair then they can start their own business.

i think people that judge how and what others do with their money are usually poor and incapable of becoming wealthy themselves. I prefer to focus on my own success and not the destruction of others.

well thats all right then .... off to spin a cocoon

Javo, are you free next wednesday, some friends and I are having dinner...

As a student, im always free...