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Corporate Revolution: Switzerland Kisses Goodbye To The Golden Parachute

The good kind of "golden parachute" in the Swiss Alps
The good kind of "golden parachute" in the Swiss Alps
Laurence Boisseau

BERN – Switzerland may be set to become the world champion of shareholder democracy.

Swiss voters gave overwhelming approval to the popular initiative against excessive corporate compensation -- an initiative launched by Thomas Minder, an entrepreneur from the city of Schaffhausen. Some 68% voted in favor of Sunday's ballot measure, and each local canton received at least a simple majority of support for the new law.

Polls had shown that the text of the proposition had already convinced most Swiss voters even before the so-called “Vasella effect.” Three weeks from the vote, the country learned that president of pharmaceutical group Novartis, Daniel Vasella, was about to be granted a 72 million Swiss francs ($75.3 million) parting bonus. His refusal to cash in on the massive "golden parachute" wasn’t enough to appease popular anger.

Long trailing behind neighboring countries in terms of corporate oversight, Switzerland is now poised for a true revolution, ready to become a veritable model in shareholder democracy. Every year, the shareholders will - inconveniently for them - have to approve the salary of both the top tier of management and the executive board. Board members will also need to be reelected annually (as opposed to the previous three-year mandates), and on an individual basis.

Risk of jail time

Both parting “golden parachutes” and signing bonuses will be prohibited. In case of violation of the General Assembly’s decisions, the executives will face criminal charges that can be punishable by three years of jail time and a fine equivalent to six years of salary.

This text is binding, as it will be added to the Swiss constitution -- which is almost never prone to modifications.

“I’m glad that this struggle is over,” said Thomas Minder to the German-speaking Swiss TV channel SRF.

This Robin Hood of Switzerland's corporate world started his battle in 2002, after SwissAir’s 2001 downfall and the scandal of the 12.5 million Swiss francs ($13.2 million) signing bonus from Nestlé to its then incoming CEO Mario Corti.

Minder’s company, Trybol, specializing in cosmetics, was one of the airline’s subcontractors, and was denied payment at the time.

Now begins another battle as to how this popular initiative will be enacted and applied. Switzerland's Federal Council has one year to enact the specific conditions according to which this new constitutional amendment will be enforced. The regular legislative process seemed off the table, for the Parliament was too slow to agree on an indirect counter-proposal.

“We know how divided the Parliament is,” said Minder. “The Federal Chambers had bargained for years over the initiative and its counter-plan, before it was presented to the citizens.”

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Migrant Lives

Latin America's Migrants Trying To Reach The U.S.: Risk It All, Fail, Repeat

Searching for a safe home, many Latin American migrants are forced to try, time after time, getting turned away, and then risk everything again.

Photograph of thousands of migrants marching  to the US-Mexican border under the rain.

06 June 2022, Mexico, Tapachula: Thousands of migrants set off north on foot under the rain.

Daniel Diaz/ZUMA
Alejandra Pataro

BUENOS AIRES — With gangsters breathing down his neck, Maynor sold all of his possessions in Honduras, took his wife and three kids aged 11, 8 and 5, and set out northwards. He was leaving home for good, for the third time.

"I had to leave my country several times," he said, "but was deported." He was now trying to enter the U.S. again, but the family had become stuck in Mexico: "Things are really, really bad for us right now."

Migration in Latin America is no longer a linear process, taking migrants from one place to another. It goes in several directions. Certain routes will take you to one country as a stopover to another, but really, it's more a lengthy ordeal than a layover, and the winners are those who can find that receptive, welcoming community offering work and a better life.

The aid agency Doctors Without Borders (MSF) calls this an international, multidirectional phenomenon that may include recurring trips to and from a home country.

Marisol Quiceno, MSF's Advocacy chief for Latin America, told Clarín that migrants "are constantly looking for opportunities and for food security, dignified work opportunities (and) healthcare access." These are the "minimum basics of survival," she said, adding that people will keep looking if they did not find them the first time around.

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