Ethos criticises company bosses' earnings

Ethos wants more transparency at the top Keystone

The Swiss investment foundation Ethos has criticised the lack of transparency concerning what bosses earn at the country's top 100 listed companies.

This content was published on November 9, 2006 - 12:29

It points out that top managers last year received up to 30 per cent more in salary and benefits than in 2004.

Ethos is calling for more details to be made available to investors and more shareholder rights at company annual meetings.

The study, which the foundation says was prompted by cases of "fat cat" salaries in Switzerland, says the salaries of directors and management in listed companies is an issue of "serious concern".

The average pay of executive directors and executive management in the 100 companies amounted to SFr2.2 million ($1.76 million), according to the report, which was presented in Zurich on Thursday.

The average remuneration of non-executive board members was SFr230,000.

Ethos said that companies' disclosure about pay rarely exceeded the minimum required by a directive of the Swiss stock exchange (SWX).

This fell short of international standards and did not allow shareholders to form an informed opinion of remuneration policy.

The Geneva-based foundation called on companies to apply the rules of international best practice, in particular by strengthening the link between pay and performance.

Ethos also said it would like the annual meeting of shareholders to be able to cast an "advisory vote" on remuneration for listed company board members and management.

It pointed out that this practice was recommended by the Organisation for Economic Cooperation and Development and worked well in several European countries, including Britain, the Netherlands and Sweden.


The head of a small Swiss company last month launched a people's initiative to combat the excessive salaries of top managers of Swiss companies.

Thomas Minder, the boss of the Trybol cosmetics firm in canton Schaffhausen, launched the initiative against what was termed a "rip-off mentality".

He claims government plans to revise company laws do not go far enough and is also demanding an increase in shareholders' rights.

The initiative demands that company annual assembles set salaries, bonuses and other benefits for top management and directors.

It also wants shareholder meetings to be given the opportunity to elect the management team on an annual basis.

swissinfo with agencies

Key facts

Switzerland's two largest banks UBS and Credit Suisse have the most expensive management teams. Last year CS handed out SFr225 million and UBS SFr223 million.
Reinsurer Swiss Re (SFr84 million) and pharmaceutical company Novartis (SFr71 million) come third and fourth in the rankings.
The highest remuneration for a board member with a managerial function is Novartis CEO Daniel Vasella (SFr30.8 million).
He is followed by UBS president Marcel Ospel (SFr24 million), Franz Humer of Roche (SFr14.8 million) and Peter Brabeck of Nestlé (SFr14.4 million).

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The Swiss Foundation for Sustainable Development was created in 1977 by two Geneva-based pension funds and now has 75 institutional investors.

Its aim is to promote sustainable development principles and corporate governance best practice in investment activities.

It advises investment funds and asset management mandates worth SFr1.6 billion.

Ethos also carries out analyses of shareholder meetings and has a programme that promotes dialogue with companies.

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