When the boss earns 141 times more than the employee

The pay gap continues to widen, according to a Unia study, which says across-the-board pay increases are needed

According to a Unia study last year, the bosses of around 40 large Swiss corporations earned an average of 141 times more than their lowest-paid employees. This union survey, conducted every year since 2005, shows the evolution of compensation in the largest companies and thus the trends in work in the business world. It turns out that the wage differentials continue to widen under the influence of the stagnation of low wages and the increase in managerial salaries. The most glaring inequality is at Roche, where Severin Schwan earns 307 times more than the employee with the lowest salary. So he would have to work 307 years to get the 15 million francs that the CEO collects annually. Roche is followed by UBS, Logitech, Nestlé, Alcon (pharmaceuticals), Novartis, Temenos (software) and ABB. Next up is the Richemont group, which grew from a gap of 1:96 to 1:179 between 2020 and 2021 as the top salary increased by 86%. At the other end, on the side of the good students, we find Bachem, which is active in the pharmaceutical sector, and the Coop Group. The difference between these two companies is 1:12, the coefficient proposed by the Socialist Youth in their initiative “For fair wages”, which was rejected by the people in 2011. With 1:18, Migros performs worse than its competitor. In half of the companies surveyed, the lowest wages are below 50,712 francs or 4,226 francs per month.

“The average pay gap that we pulled from our study is representative of the largest companies. Managerial salaries are not as high in the smallest, but we have noticed that the differences are increasing there too,” says Noémie Zurlinden, an economist in Unia’s political department and responsible for the study. According to data from the Federal Statistical Office, the bottom 10% of salaries increased by just 0.5% between 2016 and 2020, while the top 10% increased by 4%. Compensation for top executives, or 10% of senior executives, increased by 12%. Nominal wages have increased by only 2.5%, this stagnation is not justified insofar as productivity has increased significantly over the same period.

Here are the ten companies with the biggest pay gaps between their lowest paid employees and managers in 2021. Roche CEO Severin Schwan wins the day. In this company, the employee with the lowest wage would have to work 307 years to earn as much as his boss, and earn more than 15 million francs a year.

Increase urgently…

“In order to stop this trend, it is important to become aware of the need for a general increase in wages and in particular low and middle wages,” explains Noémie Zurlinden. Employees need to get a bigger share of the value they produce. This increase will also take on an urgent character this year due to rising prices. Workers risk a drop in disposable income. This is particularly problematic for low-income earners. Companies not only have to take responsibility for their employees, but also for the economy. If purchasing power falls, the consequences will be felt by everyone. In this sense, individual increases, which by their very nature do not benefit everyone, are not enough.

For the economist, limiting wage differentials as proposed by the Socialist Youth initiative could be a valid measure. “But we have seen how difficult it is to materialize such claims. In the meantime, I think we need to work as a union in companies to push for general wage increases. The Unia trade unionists can undoubtedly rely on this study in the wage negotiations this autumn.

You can find Unia’s full wage gap study at: unia.ch

The shareholders are also very spoiled

Not only the bosses are spoiled, but also the shareholders. In the 2021 financial year, the companies examined by Unia paid out almost 42 billion francs to their shareholders, almost as much as in the previous year. Roche, Nestlé, Novartis, ABB and UBS again top the list.

In addition, shareholders benefited from $40 million in share buybacks. This practice consists of listed companies buying back part of their own shares in order to destroy them in order to increase prices.

Four companies paid out an amount that was higher than EBIT, namely Roche, Nestlé, Temenos and Lindt & Sprüngli. In order to make these payments, these companies have to draw on their reserves or go into debt, which affects capital projects and reduces personnel costs. Credit Suisse is also strong, despite losses of 1.65 billion, the bank manages to pay out 257 million in dividends.

Some companies that are making big profits do not hesitate to lay off en masse. This is the case of Novartis, which laid off 400 employees at its Basel site last year and announced at the end of June that it would be cutting more than 8000 jobs worldwide, including 1400 in Switzerland, ie more than 10% of its workforce in our country. Roche and UBS cannot be topped with 400 and 700 layoffs respectively.

The Unia study again compared the level of payments to shareholders with personnel costs. At Roche, which still tops the list, the shareholder ratio is 62.9% versus just 37.1% for employees. They are followed by EMS-Chemie (62.7% / 37.3%) or Nestlé (49.8% / 50.8%). However, personnel costs are not known for certain companies such as ABB or Novartis.

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