Sunday, March 3, 2013

Europe Takes on Executive Pay

Three  articles - well worth your read

Published on Sunday, March 3, 2013 by Common Dreams
"Fat cat initiative" reins in corporate pay
- Andrea Germanos, staff writer
On Sunday Swiss citizens voted overwhelmingly to rein in exorbitant executive pay.

Days before the Swiss vote, the EU parliament approved a plan to cap bonuses for financial executives and bankers.
Read the whole thing

And then there is this longer article:

The Swiss vote for stricter rules on executive pay was sparked by outrage over a proposed $78 million payment to outgoing chairman of drugs company Novartis Daniel Vasella

Despite threats from some executives, Switzerland is unlikely to see an exodus of big companies who have previously been drawn to the country by low taxes, stable politics and business-friendly laws.

And companies will seek ways around the new rules to reward executives, just as banks in Europe are looking to soften the impact of a cap on bonuses for top staff agreed by European politicians on Thursday.

The Swiss vote comes as the European Union tries to push through a proposal which will mean bankers bonuses will be capped at a year's pay and a perk of two years' salary could only be paid if a majority of shareholders agreed to it.
Read the whole thing

There's jail-time attached to this new law

Some of Mr Minder’s critics – who include an array of political parties, many leading companies and the business lobby Economiesuisse – fret that his proposals will scare businesses away. Others said the measures, which include jail sentences for executives who do not abide by the new rules, are too draconian.

Mr Minder rejected such criticism. Without the criminal sanctions, he argued, the measures would be toothless.

Three years in jail is perfectly reasonable,” he said. “If you don’t pay the bill in a restaurant in Switzerland you can get up to three years in jail. The whole text would be worth nothing if it didn’t include criminal sanctions.”
Read the whole thing

Hopefully this will spread.

I wonder if US corporations who have relocated their offices to Europe to avoid paying US taxes will be affected by this.

No comments:

Post a Comment