"1:12 Referendum" Voted Down in Switzerland
Swiss voters have rejected a proposal that would have capped executive pay by a decisive margin.
The proposal, also known as the "1:12 referendum", would have meant that executives would have been restricted from earning more than 12 times the compensation of a company's lowest paid employee.
The "1:12 referendum" was decisively voted down by a 65.3% to 34.7% margin.
The leading sponsor of the referendum, David Roth, president of the Young Socialists in Switzerland, said that he was "disappointed" by the outcome, but vowed to press on when it comes to limiting executive pay. The 1:12 referendum also had the support of the Green Party of Switzerland.
The "no" vote is not particularly surprising given that the Swiss Parliament and government had come out against the proposal.
Proponents of the referendum argued that it was necessary in order to foster a "fair" system of remuneration in the country, and that a restriction on executive pay would have meant that more money would have trickled down to the lowest paid employees of companies based in Switzerland. Those in favour of the referendum railed against firms such as Roche and Novartis where the best-paid executive received a salary that was more than 200x the salary of the company's lowest paid worker.
Opponents of the referendum argued that it would result in a number of Switzerland's biggest companies picking up and relocating to other countries. They also argued that it would have severely compromised the competitiveness of Switzerland as a place to do business.
The referendum was defeated by a large margin, but this likely isn't the last that we've heard of restricting executive compensation in Switzerland.
Source: TheGuardian.com - Switzerland Votes Against Cap on Executive Pay
Filed under: General Knowledge