There's a head of steam building up about executive salaries. Not only has Oxfam decided to weigh in on the side of the Living Wage, but, as Matthew Lynn reports in Moneyweek, the Swiss have decided to tackle the subject head on. A referendum this year forced companies to get shareholders' agreement on top salaries and another later this month will, if successful, force them to limit the highest salary a quoted company pays to twelve times the lowest. (Although currently that ratio is ninety-three to one in Switzerland, it's over two thousand to one in the UK.) It's hardly surprising that our governments only allow us a referendum once every forty years or so, if that is the sort of laws they produce.
Of course, all the over-renumerated executives are prophesying an exodus of big companies if the Swiss vote in favour of the twelve to one ratio, but if that's the way the vote goes, then their bluff may well be called. After all, Switzerland is one of the richest countries in the world and the most lightly taxed: it's hard to make a case for moving elsewhere if this is going to land the company with not only higher salary costs, but a much greater tax bill as well. Also, it is very hard for the same overpaid executives to argue against the first referendum result. This can't be simply passed off as a result of the politics of envy. The shareholders are the owners of the company and if they are happy to vote the top management massive salaries, who's to complain. They, the shareholders are, after all, paying for it. If they are not happy, then why should they not be able to do something about it, directly. It would end the scam where a small group of of the same people sit on the boards of some companies and occupy senior management positions in others and routinely vote each other huge pay rises, at the expense of the shareholders.
