Suiss referendum: restrict corporate bonusses and salaries for managers

[Figment]

http://www.guardian.co.uk/world/2013...-executive-pay

Interesting development in the homeland of banking.

[Baneblade]

I'm rather fond of my 25 Rule. No taxable total income can exceed 25 times that of the total taxable income of the lowest paid employee of that same business. Want to get paid 25 million a year? Pay your janitor a million a year.

[ChipMHazard]

It's good to see that Switzerland is going in front with demanding more responsibility from the corporations. Shows what a population can do if they set their minds to it.

Originally Posted by Baneblade

I'm rather fond of my 25 Rule. No taxable total income can exceed 25 times that of the total taxable income of the lowest paid employee of that same business. Want to get paid 25 million a year? Pay your janitor a million a year.

I like that.... Too bad our railway company, which half is owned by the state, have taken the same view. Without public knowledge prior to doing so
But for a privately run firm, sounds good.

[Figment]

For the Netherlands a (sadly voluntary) norm was instituted in 2006 (Balkenende norm). The norm suggests that no public servant is supposed to earn more than the prime-minister, who at the time had a salary of E. 144.000,-. This despite of the argument that "in the market of managers, corporations pay more". According to http://www.loonwijzer.nl/home/salari...andse-politici , the current prime minister salary is E. 144.182,-. Interestingly, the minister and parliament salaries were raised prior to the norm per the initiative of the social-democrats (Labour). >.>

At the time, there were quite a few scandals with top-management in the public sector that utilised public funds money for things like the furnishing of their offices (in the order of millions), renting office buildings that were far larger and more expensive than their department required and some other things. And these guys if fired of course would get a golden handshake. The same norm thus also applied to the public television channels, where quite a few earned three or four times the salary of the prime-minister (for a couple of hours of talkshow hosting or entertainment every week).

A lot of public outrage drastically toned down those salaries.

In 2008 just over 2000 public and semi-public employees earned more than the prime minister: just over 75% of them in healthcare, a lot of the others are employed in higher education. In 2013 this is around 2600 people.

[MrVicchio]

Originally Posted by Baneblade

I'm rather fond of my 25 Rule. No taxable total income can exceed 25 times that of the total taxable income of the lowest paid employee of that same business. Want to get paid 25 million a year? Pay your janitor a million a year.

Or just ensure the best talent works outside the country....

[Figment]

Originally Posted by MrVicchio

Or just ensure the best talent works outside the country....

Would be an entirely moot point if everyone follows the same rules. With this suiss precedent, I'm curious to see if other populations have the balls to follow suit.

Besides MrVicchio, wouldn't you say that "talent" (aka the most ambitious) often times seems to mean greediest, most manipulative, selfish bastards that will sell-out their company for a personal bonus of millions or go pretty much over dead bodies for a profit? I'm not so sure if the top management can't be persuaded to be content a bit sooner. I'd rather have someone that has loyalties to and heart for the company they work for rather than their paycheck.

Personally I'd be in favour of having stock exchanges being long running investments and make going short (speculating on the fall of stock value) illegal, as well as hatch funds cleaning out a company after purchasing it. The interest of the company and its employees should be top priority for investors, unions and management. Currently it's too much self-interest only.

[Baneblade]

Originally Posted by MrVicchio

Or just ensure the best talent works outside the country....

Oh I dunno, I think investors might catch on to the whole gouging them thing once they taste what it is like to have reasonable pay for executives.

[MrVicchio]

Originally Posted by Figment

Would be an entirely moot point if everyone follows the same rules. With this suiss precedent, I'm curious to see if other populations have the balls to follow suit.

What a horrible idea...

Originally Posted by Figment

Besides MrVicchio, wouldn't you say that "talent" (aka the most ambitious) often times seems to mean greediest, most manipulative, selfish bastards that will sell-out their company for a personal bonus of millions or go pretty much over dead bodies for a profit? I'm not so sure if the top management can't be persuaded to be content a bit sooner. I'd rather have someone that has loyalties to and heart for the company they work for rather than their paycheck.

You're very mired in class envy aren't you? When I see a successful person, a wealthy person my first thought isn't anger or jealousy of their position, my first thought is "How can I be successful like they are?".
Why be loyal to a company that isn't paying you for what you bring?

Originally Posted by Figment

Personally I'd be in favour of having stock exchanges being long running investments and make going short (speculating on the fall of stock value) illegal, as well as hatch funds cleaning out a company after purchasing it. The interest of the company and its employees should be top priority for investors, unions and management. Currently it's too much self-interest only.

You seem to have a misinformed view of what a business is about.

I ask you this in all honesty, "What is the purpose of a business?"


I'll be back to hear your answer.

[MrVicchio]

Originally Posted by Baneblade

Oh I dunno, I think investors might catch on to the whole gouging them thing once they taste what it is like to have reasonable pay for executives.

You completely misunderstand why top executives make what they do.

I'll ask you the same question:
"What is the purpose of a business"

[Baneblade]

I understand fine. I also understand most executives aren't worth a bear shit in the woods.

[MrVicchio]

Originally Posted by Baneblade

I understand fine. I also understand most executives aren't worth a bear shit in the woods.

What is the purpose of a business? Your assessment of executives is irrelevant.

[ChipMHazard]

To create a customer, as per Drucker. Or perhaps a bit more precise: Customers, profits and shareholder values.
Strong business ethics is also required to keep your business alive and secure the above. History has shown us that short term profit gains can lead to disaster.

[MrVicchio]

A business exists to earn a profit for those with a vested interest in said company. I.E. shareholders, investors or in small companies the owner. A worker has no vested interest in the company. They did not risk their own capital, they applied for a job from which their time/effort would be rewarded with a paycheck.

The CEO, upper management are the officers those who have invested into the company entrust to earn them PROFIT.

Are there bad business leaders, greedy bastards out there? Certainly. But the answer to these issues is not to limit profit. That's a very poor way of approaching the problem. You stymie initiative. Why should I work hard when my hard work isn't rewarded. Why should I invest my money in a company when my money will be "given" to the janitor? hmm? When my money won't buy the best talent we can find to make me MORE money?

There is nothing wrong with wanting to make more money.

[Figment]

Originally Posted by MrVicchio

What a horrible idea...

Don't really see why it's supposedly so horrible to have people NOT determine their own wages if they've been hired to work for the owner of a business.

Note that nobody is limiting the height of the salary, just who determines it and that bribes are banned. Because hiring someone by attracting them with a bonus BEFORE they've done anything for a company, or getting rid of someone by giving them a bonus when they turned out to be very bad for the company, are both forms of bribes that ultimately are very questionable.

You're very mired in class envy aren't you? When I see a successful person, a wealthy person my first thought isn't anger or jealousy of their position, my first thought is "How can I be successful like they are?".

Some do that by kicking down and undermining everyone else. Is that an example to you? Sorry, but I've got some ethics. This isn't class envy, this is about bonusses being awarded to people that don't deserve it.

You can be successful without having a board determine your salary, but the shareholders.

I'm not sure where you get this whole class envy from, because that's got nothing to do with it.

Why be loyal to a company that isn't paying you for what you bring?

Dude, why assume one would bring THAT much that another couldn't do that? You know how many CEOs and other excellent managers there are in the world?

You seem to have a misinformed view of what a business is about.

I ask you this in all honesty, "What is the purpose of a business?"


I'll be back to hear your answer.

A lot of things. First off, the main goal of a company is to be a source of income for the owner. Secondly, to provide a source of income for the employees.

The way one does this is by producing or selling goods or services.

Management is there to steer it in the appropriate direction. However, this doesn't mean they should get bonusses of any kind per definition. I don't believe the goal of a company is to hand out millions of moneys to a top layer of bureaucrats. It's possible, but the question is if that's actually fair or ethical when one gets a bonus in the order of millions for firing thousands of people.

I'm also very skeptical of providing a bonus for taking another company over. If it's your job to take over other companies, then that's like getting a bonus for felling a tree as a lumberjack. You'd think you already got a decent salary to perform your job. If bonusses are required to stimulate you to do execute your work properly, then perhaps you're not really that suited for or passionate about the job. That the top circle that assigns salaries assigns themselves a bigger share and often exagerates their own contributions and their own egoes, is basically a matter of power corrupts and absolute power corrupts absolutely.

If they have a responsibility to the shareholders, who are in fact the owners of the company, then it's only right that they do not get a hand in determining their own salaries or what private expenses they can and can't put on the company's bill.


The problem with boards is that they're often old boys networks. They have an interest in keeping salaries high, because they themselves will get better pay then as well. Investors however, are the ones who take the main risks. They have a lot less incentive to assign over the top salaries and should have a much better interest in the economical viability of the company. Since if it goes bad, it's their own money they lose. A current top-manager may lose their job, but will still get out with millions to spare because it isn't their own assets they've been managing.

[MrVicchio]

Originally Posted by Figment

Don't really see why it's supposedly so horrible to have people NOT determine their own wages if they've been hired to work for the owner of a business.

If a company isn't offering wages you would like to work for... don't work for them. I fail to see where the problem lies.

Originally Posted by Figment

Note that nobody is limiting the height of the salary, just who determines it and that bribes are banned. Because hiring someone by attracting them with a bonus BEFORE they've done anything for a company, or getting rid of someone by giving them a bonus when they turned out to be very bad for the company, are both forms of bribes that ultimately are very questionable.

That's because you just see headlines that read "CEO Joe Jones, hired with a $20,000,000 bonus, has said the company will cut 10,000 jobs and lose down two more factories over the next 6 months, Company losses are expected to be 250 Million". This is generally followed by sob stories of the families affected by the layoffs, and rabble rousing about the CEO's 20,000,000 bonus plus severance package lined up. What you DON'T ever hear, is that the company was looking at 500 million in losses and possible completely going out of business. That isn't a good human interest story, that doesn't further the agenda. Furthermore, the people that hired the man, felt he was WORTH the huge bonus and severance package. They hired him, not you. Are you saying companies shouldn't be free to hire who they choose?

Originally Posted by Figment

Some do that by kicking down and undermining everyone else. Is that an example to you? Sorry, but I've got some ethics. This isn't class envy, this is about bonusses being awarded to people that don't deserve it.

YOU don't think they deserve it, because you only see a small view of the situation and don't know what's going on behind the scenes.

Originally Posted by Figment

You can be successful without having a board determine your salary, but the shareholders.

The board are the ones appointed by the shareholders, that's how it works.

Originally Posted by Figment

I'm not sure where you get this whole class envy from, because that's got nothing to do with it.

You may not realize it, but your entire argument is steeped in class envy. Sorry.

Originally Posted by Figment

Dude, why assume one would bring THAT much that another couldn't do that? You know how many CEOs and other excellent managers there are in the world?

I don't presume to know who the best person to run a company is, that is up to the company. Sometimes they make mistakes. It's called life. It comes with risks.

Originally Posted by Figment

A lot of things. First off, the main goal of a company is to be a source of income for the owner.

Close, but not quite.

Originally Posted by Figment

Secondly, to provide a source of income for the employees.

Nope, wrong. Employees have nothing to do with it.
A Business exists to provide a profit to those whom have a vested interest in the company. If it were about employees we wouldn't have automation in industry for example.

Originally Posted by Figment

The way one does this is by producing or selling goods or services.

Yes.

Originally Posted by Figment

Management is there to steer it in the appropriate direction. However, this doesn't mean they should get bonusses of any kind per definition. I don't believe the goal of a company is to hand out millions of moneys to a top layer of bureaucrats. It's possible, but the question is if that's actually fair or ethical when one gets a bonus in the order of millions for firing thousands of people.

They get those millions after firing a bunch of people generally as a reward for making the company profitable, for saving an investment. Lets say you had Company, lets call it "Acme". Now Acme has investors who collectively have invested somewhere north of a billion dollars into the company. There is a down turn in the company, things aren't going well. The signs all point to that billion becoming 500 million and then the company going out of business. They hire Joe Jones, he gets in, fires a bunch of people and the long term prospects of the company turn around. 20 million is a small price to pay as a reward for Joe's guidance. The fired employees are of no concern in the equation from a business perspective.

Originally Posted by Figment

I'm also very skeptical of providing a bonus for taking another company over. If it's your job to take over other companies, then that's like getting a bonus for felling a tree as a lumberjack. You'd think you already got a decent salary to perform your job. If bonusses are required to stimulate you to do execute your work properly, then perhaps you're not really that suited for or passionate about the job. That the top circle that assigns salaries assigns themselves a bigger share and often exagerates their own contributions and their own egoes, is basically a matter of power corrupts and absolute power corrupts absolutely.

You really don't understand humanity do you? Athletes, top athletes are paid top dollar for their services, do you think they don't ALSO love what they do as well making a nice paycheck? Hmmm? By your thinking all athletes should get paid the same, all movie stars... just because they "love to do it".

That is a nice pipe dream, but that's all it is, a dream.

Originally Posted by Figment

If they have a responsibility to the shareholders, who are in fact the owners of the company, then it's only right that they do not get a hand in determining their own salaries or what private expenses they can and can't put on the company's bill.


The problem with boards is that they're often old boys networks. They have an interest in keeping salaries high, because they themselves will get better pay then as well. Investors however, are the ones who take the main risks. They have a lot less incentive to assign over the top salaries and should have a much better interest in the economical viability of the company. Since if it goes bad, it's their own money they lose. A current top-manager may lose their job, but will still get out with millions to spare because it isn't their own assets they've been managing.

Again, this entire diatribe is class envy prattle. You have zero clue how a business works, or why pay is the way it is. You think it's a bunch of heartless rich guys hooking each other up and not caring about "the little guy" and bemoan the fact they make huge sums of money that YOU in your ignorance of business don't believe they have earned.


It's not your place, or mine to tell a company how to pay it's employees, any of them.

If you think your model is the right one, START A BUSINESS on that model. Go for it, no one is stopping you, let us know how it works out.

Are you basically saying:

From each according to his ability, to each according to his needs!