The Swiss turn on the super-rich

[HiPointDem]

In February 2008, Thomas Minder, a Swiss businessman whose family-owned company is best known for its old-fashioned herbal toothpaste, attacked his banker, UBS Chairman Marcel Ospel, as if he were a form of stubborn plaque. At a shareholders' meeting in Basel, he stormed the podium as Ospel addressed the crowd. Ospel's bodyguards grappled with Minder and wrestled him away before he could land his symbolic blow — he was trying to hand the embattled head of Switzerland's largest bank a bound copy of Swiss company law, which codifies corporate temperance.

"Gentlemen, you are responsible for the biggest write-downs in Swiss corporate history," Minder had railed just a few minutes before, referring to UBS's loss of $50 billion during the subprime meltdown that prompted it to seek a government bailout. "Put an end to the Americanization of UBS corporate philosophy!"

The bodyguards marched Minder out of the hall amid a chorus of boos and jeers. Two months later, Ospel was gone, taking the fall for UBS's recklessness, but Minder's campaign against big bonuses had only just begun; shortly after Ospel was ousted, Minder filed the 100,000 signatures needed to launch a referendum to impose some of the tightest controls on executive compensation in the world.

Of the top 100 Swiss companies, 49 give shareholders a consulting vote on the pay of executives. A few other countries, including the United States and Germany, have introduced advisory "say on pay" votes in response to the anger over inequality and corporate excess that drove the Occupy Wall Street movement. Britain is also planning to implement rules in late 2013 that will give shareholders a binding vote on pay and "exit payments" at least every three years. Minder's initiative goes further, forcing all listed companies to have binding votes on compensation for company managers and directors, and ban golden handshakes and parachutes. It would also ban bonus payments to managers if their companies are taken over, and impose severe penalties — including possible jail sentences and fines — for breaches of these new rules.

Despite strong opposition from the business elite, Minder's initiative is given a good chance of passing when it goes to a vote on March 2. Even if his referendum fails, the country will automatically adopt a counterproposal put forward by parliament that would compel companies to hold votes on executive pay, although the results would not be binding.

This is a stunning turn of events for the land of secret bank accounts and carefully calibrated neutrality. Even though most Swiss enjoy a very high standard of living, Minder's campaign has struck a chord in a proudly egalitarian country increasingly unhappy with a growing class of super-rich unafraid to flaunt their wealth.

http://www.reuters.com/article/2013/01/21/us-reutersmagazine-davos-swiss-rich-idUSBRE90K0F420130121

[Spitfire of ATJ]

1. "super-rich unafraid to flaunt their wealth."

Not to mention their privilege.

[Democracyinkind]

2. Shitty article. Then again, no one seems to get it right about Minder.

I'm sick and tired of people promoting Minder's initiative as some kind of socially enlightened policy or as in any way progressive. It is not as much about "the rich" as it is about control of corporations.

The initiative wants to write the following points into the constitution:

1. Stockholder's' meetings decides upon each and every compensation paid out by the company.

2. Eliminate bonuses, no golden parachutes, no pre-payouts

3. The company must have written statutes on how it borrows money to its board members or how it compensates them, in the same statutes, it would be necessary to dictate on how many other boards a person may sit as it would be necessary for the statutes to declare regular terms for board members (board members would have to be hired for a certain amount of time, specified by the stockholder's before hiring the board).

So what has this to do with the "Super Rich", you might ask? Well, not much. Presumably, some of those Super Rich people are believed to be CEO's (from what I know, I doubt that Swiss CEO's are truly the "Super Rich" in this country, but anyway..)

So Minder had this great idea: ALL POWER TO THE STOCKHOLDERS'!!! WE CAN CREATE AN EGALITARIAN SOCIETY IF WE GIVE TOTAL CONTROL TO THE STOCKHOLDERS!

I think this is naive, stupid, and a pretty indecent scam perpetrated against the people. Use the fact that people are totally riled up about the criminally insane compensations given to management in order to definitely establish the supremacy of the stockholder in our society.

What would the effect of this law be? Nada - Zilch: I currently own shares of large swiss banks, industrial conglomerates and pharmaceutical companies (2 shares each, not for profit, but because the stockholders' meetings and literature are the best way to keep informed about these global players). I think every single time that compensation was voted on, stockholders' ok'ed or even raised compensation. So there's really no reason to believe that this initiative would change anything about that.

It's about capitalism; turbo-capitalism; the kind of capitalism that openly declares: The Stockholder is the only relevant measure. All else is unfair, theft, statism, bla bla bla.

Progressives, beware of the wolves (stockholder-fetishists) in sheep's clothing (populist rhetoric against management compensation).

Don't let them stockhold the stakehold out of our system!

Edited to add: I fully support measure 2+3 of Minder's program - those are steps in the right direction, surely. But I'd rather see more state-and stakeholder control than simply an increase of stockholder control.

[HiPointDem]

3. thanks for the reality check!

[ErikJ]

4. Much simpler solution, raise the top marginal tax rate to 90%

So that any income over say $3 million a year is taxed at 90%. This is foolproof.