Next weekend many Swiss are going to vote for or against an initiative. It is basically the extension for the “Minder” Initiative that affected public companies. This initiative is called “1:12”. This initiative proposes, that no employee, including the executive management, should earn in a company more than 12 times the lowest paid!
First large part of the voters want to limit how remuneration in a stock listed company is set. Then young socialists in Switzerland have launched a very questionable federal initiative to limit the maximum pay in private companies. This initiative affects also SMEs.
Citizens of many nations, seem have a tendency to allows states to control more and more private matters. At least there is no clear opposition to this movement. Secondly privately operating companies, prime examples are banks, do seem to have a tendency to excessiveness in remuneration.
Is this is a typical “chicken and egg” problem!
No, I think this is a leadership challenge. The true leadership seems to missing at all levels and parts of society.
The SME owners or CEOs I know, would not have a problem with the 1:12 cap, because most of them do not earn that much more than the lowest paid employee. Large portions of SME earnings are going anyway back into equity.
This latest 1:12 initiative, as the Minder initiative, does nothing else but making a society bureaucratic and certainly not keeping it flexible enough to respond to the real market needs.
Particularly during times when Switzerland needs more manufacturing companies, Switzerland is potentially not anymore on top of the investment regions, due to these pay -limiting laws or initiatives.
Without them though, Switzerland with its very entrepreneurial laws would be a highly attractive location for SME manufacturing.