Nemesis Project: executive salaries

Showing posts with label executive salaries. Show all posts

Saturday, October 12, 2013

Swiss set their sights on excessive corporate pay

The Swiss people are showing that citizens can organize and take action to address growing income inequality by placing restrictions and caps on executive salaries.

Since the 2008 global financial crises Swiss citizens have set their sights on excessive corporate pay and rising income inequality.

Already public activism by the Swiss people on executive pay has forced two referendums and efforts are underway to force a third referendum. Under Swiss law citizens are able to organize popular initiatives whereby the Swiss Parliament must hold a referendum on any initiative that has gathered more than 100,000 signatures.

In March 2013 the Swiss voted overwhelmingly to pass some of the strictest controls on executive pay, requiring that public company shareholders vote on compensation for executives.

In November 2013 the Swiss people will get a vote on another proposal to to cap and limit executive pay. The 1:12 initiative will limit executive pay to no more than 12 times the salary of the lowest paid worker. Compare that to the USA which has among the highest levels of income inequality in the world with a CEO to worker pay ratio of 185:1 and here in Australia where the CEO to worker pay ratio is 100:1

Unsurprisingly, corporations and business groups oppose the Swiss 1: 12 initiative claiming that it will abolish prosperity and is an attack on freedom. Global multinational corporations like GlencoreXstrata threaten to move their headquarters out of Switzerland if the proposal is passed.

Now Swiss citizens are trying to establish a guaranteed basic income for all citizens.

On Friday Swiss citizen activists submitted over 130,000 signatures to the Swiss Parliament- enough to call a vote over whether or not to approve the proposal- to create a law guaranteeing all Swiss nationals a guaranteed basic income of around $2800 per month. In a public display of support, advocates of the measure tipped over a truck full of 8 million 5-cent coins (one for each citizen of the country.)

Friday, April 23, 2010

Taking money that belongs to others: the criminality of excessive executive compensation

image copyright of Bruce Petty

In mainstream Australia there continues to be galvanized anger about the exorbitant salary packages corporate executives are paying themselves, in defiance of public opinion, economic realities and the public interest.

As public outrage grows and more shareholders revolt about excessive executive salary packages its time to break through the web of illusions and justifications about excessive executive compensation presented by corporate Australia, political leaders, the corporate media and given credence by bodies such as the Productivity Commission.

In a recent paper titled "Exorbitant CEO compensation: Just reward or grand theft" in the Journal Crime, Law and Social Change criminologist David Friedrichs argues that executive compensation packages should be considered as a form of white collar crime. For Friederichs it is time to criminalize this behaviour. He calls it a form of robbery.

Friederichs is Professor and Distinguished University Fellow, Sociology/Criminal Justice, The University of Scranton and a lifelong researcher on corporate and white collar crime.

He argues that the corporate culture and practices that provide for and justify excessive executive compensation for corporate executives not only creates what he calls "crimogenic conditions" but are likely to lead to the taking of money that belongs to others.

Friederichs writes:

""Walking into a bank with a gun and demanding money from a teller is one way to steal money... Walking into a corporate boardroom and securing from the board's compensation committee, made up of cronies, paid consultants, and even relatives, compensation of millions sometimes tens of millions or hundreds of millions is another way to steal money. The principal differences are that the second way of stealing money pays much better, is all too often legal, and does not result in criminal prosecution and imprisonment. This needs to change"

The practices of excessive compensation have come to be viewed as standard business practice rather than as part of a spectrum of corporate criminal behaviour that goes unrecognized and unpunished. That is how corporate power works. It redefines reality to serve corporate and private interests. Its time to challenge that.

Reflections

“A corporation, essentially, is a pile of money to which a number of persons have sold their moral allegiance.”
Wendell Berry

"Corporations are to democracy what a T-Rex is to your checkers game"
Rebecca Solnit

"Political systems merely reflect the society which gives rise to them. And we live in a society-and a world-where the power of corporations is much greater than that of "ordinary people". Corporate power can readily be seen in our homes, our workplaces, our public spaces and our national debates"
Josh Fear

"The deep irony is that it is the unfettered rise of corporate power that presents the biggest threat to free markets, and to the ability of free markets to promote individual freedom, equality before the law and equitable prosperity"
Stephanie Blankenburg and Dan Plesch

" Wealth privilege remains embedded in the ancient institution of the corporation. It is a privilege out of step with market ideals, which has led to wealth disparities that threaten our political ideals. We can never really have political democracy without economic democracy".
Marjorie Kelly The Divine Right of Capital

"Democracy is not an outgrowth of free markets. Democracy and capitalism are antagonistic entities... A functioning democracy must often defy the economic interests of elites on behalf of citizens.."
Chris Hedges

"The privatization of public services and functions manifests the steady evolution of corporate power into a political form, into an integral even dominant partner with the state"
Sheldon Wolin, Democracy Inc: Managed Democracy and the Specter of Inverted Totalitarianism

Limited liability is at the heart of this rise of corporate power: it constitutes a blanket exemption of a special-interest group from accountability for the actions of their companies. While the mantra of "no rights without responsibilities" is used to regulate the behaviour of poor people who benefit from social-security payments, "the unaccountable few" enjoy feudal privileges"
Stephanie Blankenburg and Dan Plesch

"The economic, political and cultural signs of corporate colonization are increasingly abundant and readily visible in the contours of daily life"
Carl Boggs, The End of Politics

"Adult working Americans are more likely to die young as a result of organized corporate crime than any other form of criminal activity"
Michael Woodiwiss, Gangster Capitalism

"Without doubt corporate power and wealth shape politics today more than ever- in corporation's very growing presence in the economy, their extensive lobbies and influence over legislative activity, their ownership and control of the mass media, their preponderant influence over election campaigns, their capacity to secure relief from regulatory controls, their massive public relations apparatus, their general subsidies to the two parties.."
Carl Boggs The End of Politics

Our Agenda

The Nemesis Project is a Western Australian based civil society project that aims to shed light on everyday examples of corporate power and bring corporations under civil society and citizen control. We aim to highlight the ways that people are affected on a daily basis by corporate power.

We comprise a network of people and groups concerned that corporations and business have become too powerful and dominant within our society. Corporations and business have extended their power and influence into many sectors and aspects of life that should be preserved for the public good.

Corporations now exercise control over most aspects of the economy and society and use their power and money to exert control over the democratic process. In many cases the power and wealth of corporations and business have outgrown the restraints of democracy.

Although there is considerable concern about these issues efforts to address the problems have been limited and when they exist, fragmented. Strategies are needed to explore and structurally challenge the power exercised by corporations and business. The Nemesis project aims to develop an agenda to address the underlying causes of problems generated by corporate power and domination.

This blog is the first step in developing a citizen's agenda to re balance the relationship between corporate power and the power of ordinary Australians.

The Nemesis Project is an initiative of the WA Social Justice Network.