CEO Pay Cap: The Fat Cat Initiative
By lucas@endneoliberalism On 6 Mar, 2013 At 11:02 PM | Categorized As Progressive Politics | With 0 Comments

6249739893_97177eeba2Europe is considering a cap on CEO pay following Switzerland’s “Fat Cat Initiative”, approved by 68 per cent of voters.

The Swiss referendum includes giving shareholders a binding say on executive pay; banning golden hellos and goodbyes; requiring annual re-elections for directors; and threatening criminal sanctions for non-compliance.

A cap on CEO pay may be vital to reverse the global trend of CEO’s who seek personal gains while threatening the businesses they run with bad investments and dismantling the workforce at a time that corporations are earning record profits.

In a global economy with high rates of unemployment, low wages, and record levels of debt, countries will soon have to choose between progressive regulations and higher rates of taxation (Or both) to stimulate sustainable economic growth. A cap on CEO pay is much more progressive than higher rates of taxation because it leaves funds in the hands of businesses, which can reinvest in activities of their own specialization and lower unemployment via the private sector.

Bankers from London feel threatened by the new measures and warn that such regulations would drive off talent to other financial markets. On the contrary, talent is a trait that, by definition, delivers value and these days bailouts to the banking sector are increasing exponentially.

Picture credit: luccast85/CC BY 2.0

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