By Ed Silverman // January 9th, 2013 // 12:37 pm
Many people may complain about the gap between ceo compensation and the rest of the world, but the Swiss are doing more than grumbling. A nationwide vote is planned for March 3 on an initiative that would look to level the playing field by giving citizens a chance to decide whether shareholders should have more say in executive compensation, SwissInfo reports.
The initiative calls for a new article in the Swiss constitution designed to regulate Swiss companies listed on the stock exchange and to increase the decision-making power of their shareholders, SwissInfo writes, adding that the initiative completely bans golden handshakes and advance payments.
We mention this because two Novartis (NVS) execs – ceo Joe Jimenez and chairman Dan Vasella – are held up as two prime examples in which the compensation gap is huge. The lowest-paid Novartis employee would have to work 266 years to earn the $17.1 million that Jimenez received in 2011, according to the trade union Travail Suisse in its annual survey.
In third place is Vasella, whose compensation would have required the lowest-paid Novartis employee to work 229 years to earn what he was paid in 2011, according to SwissInfo. Vasella, you may recall, has previously been criticized over his compensation, after heading the ranking of top earners between 2005 and 2009.
Last year at this time, we noted that Ethos, a shareholder activist group, complained that his $14.8 million compensation in 2011 was inappropriate, given that Novartis profit fell 7 percent. Meanwhile, the drugmaker had recently announced plans to eliminate thousands of jobs, including hundreds of positions in Switzerland, where Novartis is based (back story).
“There is no economic justification for exorbitant executive salaries,” Jean-Jacques Friboulet, a professor for economic ethics at Fribourg University tells SwissInfo. The economy cannot regulate itself and that is why he backs the initiative “against rip-off salaries.”