The Federal Palace of Switzerland, which houses parliament and other government offices. (Wikimedia Commons)
Does anyone seriously doubt that, if America had the same national referendum system that Switzerland does, voters in the United States would vote just as aggressively as the Swiss have to curb CEO abuses?
Actually, the 68 percent support for Sunday’s Swiss referendum that gives shareholders broad new powers to curb excessive pay for bankers and corporate executives might well be shy of the mark that the US could hit.
Polls of American voters have regularly shown that over 70 percent favor restrictions on executive compensation, with even self-identified conservatives registering majority support for clamping down on CEOs.
And rightly so. It is not jealousy that motivates concerns about CEO pay. As the AFL-CIO’s Executive Paywatch campaign notes, when CEO pay rises so too does income inequality. In 2010, as the United States emerged from the depths of the Bush recession, a study by University of California economist Emmanuel Saez found that the top 1 percent of Americans captured 93 percent of the growth in income.
Worse yet, CEOs use their money to game the system so that they get richer while the great mass of Americans are squeezed. More than 120 CEOs are currently supporting billionaire Pete Peterson’s “Fix the Debt” campaign, which is chaired by Erskine Bowles and Alan Simpson. A deficit-reduction plan proposed by Bowles and Simpson last month would slash cost-of-living increases for Social Security recipients while at the same time reducing the top marginal tax rate for corporations and the wealthy.
In Switzerland, anger at “golden handshake” and “golden parachute” deals for executives who ran corporations poorly and seemed to be more concerned for their own good than for the long-term economic prosperity of their country, led by small businessman and parliamentarian Thomas Minder to mount a populist campaign to increase the authority of shareholders to regulate errant CEOs.
As in the United States, that’s the sort of proposal that gets a lot of talk but that was not likely to go far in the corridors of political power in Switzerland. Luckily, Switzerland has a long history of allowing citizens to initiate and implement legislative changes. Under Swiss law, any issue can be put to a national referendum if supporters of a vote attain 100,000 petition signatures seeking the test. In recent years, the Swiss have voted on people’s initiatives to guarantee “six weeks of vacation for everyone,” to put an “end to the limitless construction of second homes” that crowd Alpine villages, to expand the ability of tax-supported building society savings to finance energy saving and environmental measures, and to require money gained from maintaining casinos be used for the public interest.