Joseph de Weck Berlin
GERMANY’S opposition hailed a decision by voters in neighbouring Switzerland to introduce fresh curbs on manager compensation, raising pressure on Chancellor Angela Merkel to adopt her own tougher rules on executive pay.
Swiss voters approved a proposal to strengthen shareholder rights over compensation by a margin of 67.9 percent on Sunday, days after the EU agreed on a draft law capping bankers’ bonus payments.
The Swiss referendum puts into focus executive pay in Germany, Europe’s biggest economy, as parties attempt to win over voters before federal elections in September.
“The referendum is an important step in the right direction,” Joachim Poss, deputy parliamentary leader for the main opposition Social Democratic Party (SPD), was cited as saying in yesterday’s Neue Osnabruecker Zeitung newspaper. “The result should be taken as encouragement for the introduction of a European directive” governing pay levels across the 27-nation EU.
Manager pay has resonated before in Germany, where Merkel has criticised “fantasy compensation”. Her first-term coalition with the SPD passed a law in June 2009 – three months before federal elections – to curb manager pay at German public companies, after requiring financial institutions tapping its bank-rescue fund to cap manager pay at e500 000 (R5.8 billion) a year.
At least five of Europe’s 20 highest-paid chief executives work for Swiss companies, according to data compiled by Bloomberg.
“Yesterday was a good day, not only for Switzerland, but also for Europe and for Germany,” Berthold Huber, the chairman of the IG Metall labour union, said. “If we had some more direct democracy in Germany, which I would welcome, then the people would certainly approve such a law by more than 68 percent.”
Michael Fuchs, a deputy parliamentary leader of Merkel’s Christian Democratic Union, welcomed the Swiss vote because “it makes sure that salary decisions are made by the companies’ owners, not by the state”, he told Bild newspaper. – Bloomberg