High salaries and bonuses for top managers are outrageous. In Switzerland, a referendum ten years ago produced a clear result. In particular, on March 3, 2013, after outrage over the disproportionate remuneration of industrial group leaders, the Swiss put to a referendum an initiative against excessive remuneration, as reported by Deutsche Welle in a publication. The initiative banned certain severance pay and introduced greater transparency in executive pay. With almost 68%, the result of the referendum was clear. But has the corporate world changed forever since the vote? Yes and no: employers’ warnings that companies would now emigrate and that Switzerland would lose its appeal as a place to start a business turned out to be misguided. Compensation upon dismissal was simply replaced by other bonuses. Thus, the initiative did not directly lead to any permanent changes. However, something has changed, argues Thomas Beschorner, a professor of business ethics at the University of St. from shareholders.

What has changed since the referendum that took place ten years ago? Questionable remuneration of top managers is also an acute problem in Germany.

Society now wants a “civilized market economy” because it is fed up with the excesses of capitalism. “The world is much more sensitive to the issue of justice, whether it be the distribution of wealth, human rights or ecological economics,” Besorner says. “Society no longer accepts the tale of justified profit maximization by corporations under rigid shareholder-driven capitalism,” he said, adding that public opinion wants a more humane form of economic activity, “a civilized market economy.” In Germany, the remuneration of top managers is also a burning issue and constantly comes back to the discussion with the public. While supporters of high wages point to the responsibility of top managers often for tens of thousands of employees, critics consider the high salaries of millions unrealistic. An annual fee of more than 10,000,000 euros will be difficult to justify to the public, says Christian Holz, managing director of the investor protection association DSW.

In her opinion, salary targets for executives should reflect the growth of the company in both the short and long term. In Germany, the relevant supervisory board must set ambitious goals – financial and non-financial, as well as sustainable development goals – and demand their implementation from the executive board. DSW does not consider it necessary to establish an absolute ceiling on executive compensation. According to its own analysis and that of the Technical University of Munich, the CEOs of the Dax stock market index earned an average of 6,000,000 euros, according to the latest data for 2021, less than the CEOs of companies in the Swiss SMI index and companies included in the French index CAC 40. However, compared to the US, these amounts are almost meager: top managers of companies included in the Dow Jones index received an average of 27.3 million euros.