The Irish Economy
Commentary, information, and intelligent discourse about the Irish economy
Here is a report on the Swiss referendum.
There is still a lot of anger around bonuses paid to UBS bankers after the 2009 bailout.
The business lobby threatened blue murder if the referendum was passed.
“Le corps électoral a été plus sensible aux arguments du Conseil fédéral, des patrons et de la droite. La crainte d’entraver la bonne marche de l’économie helvétique en imposant un carcan aux revenus des dirigeants a prévalu sur les considérations morales autour des dérives salariales constatées ces dernières années.”
I have to hand it to the Swiss electorate for their perspicacity in rejecting this nonsense. I can hear the gnashing & wailing from the local chapter of Grauniad readers.
The Swiss used to be very sound on these types of question but the golf clubs were shocked with the state of the banks in 2009. The passing of the Minder Initiative on tearing the arse out of it after a senior businessman was awarded a golden parachute of 60m euro came as quite a shock. There seems to be an issue with increased remuneration at a time when share prices are not going anywhere. UBS shares used to be the bluest of blue chip and you always got the dividend. But value is such a nebulous concept these days.
You really must change your handle to CHicken Licken. By the time the sky falls in you will have spent all your net worth on margin calls on your short.
Cheers Tull. I was just thinking what an embarrassment for the FDP , Bern and Economiesuisse this referendum must have been. Almost as shameful as the minaret vote.
I’m not sure what seafoid does but, honestly, it can’t be a real job. The number of times he posts on this blog with links to stuff he has read on the internet suggests he works for a semi-state, NGO, or one of those nominally ‘private sector’ firms that’s been handed a few ‘rents’ by some Government.
Mickey D has a job for an adviser, you really should apply.
“Switzerland’s system of democracy means citizens can call nationwide votes on issues that concern them.”
Wonder would it ever catch on here?
I’m a Guardian reader! I love it.
I’m not a fan of noble defeats, but 35% of people voting for (and limits on bonuses and handshakes) is a fairly substantial marker.
I reckon the equivalent in Ireland would be saying; min., wage = approx 17k, so max., wage would be approx 205k. Sound reasonable?
I was wondering, in Switz or Ireland what ratio might have passed. 20:1 limit? 50:1? 200:1?
200:1, which according to the article is where the outlier in Switz is now, would be roughly 3.4m pa in Ireland.
But I can help thinking that a cap like that might just result in bosses and the highly paid simply getting their basic wage set at that ratio, bursting into tears at the injustice of it all and looking for top-ups.
I wonder if there is a better way of going about it?
Switzerland is a world leader in the murky business of commodity trading: 35% of global crude oil; 60% of metals and 35% of grains.
It has 500 firms in the business.
@Gavin Kostick,just finished Ian Kehoes excellent buke on Sean Quinn,highly recommended stocking filler.In the epilogue he references the “mercer” report on irish bank execs pay.Attributes that to the tensions btw. DofF and IRBC amongst a few others!
Over here or personally,we get paid last,back end or carried interrst it’s called.
Basically,the investors receive a preferred return or say interest rate that’s cumulative-again this is just rough and a guide-off 8%.They hopefully get their money back plus any unpaid preff. leaving “profit” which is then split or divided up this is negotiable-if you say walk on water good it can be 50% yep.
But clearly this “pay” model is not applicable in a lot of situations.
How would say a highly skilled lecturer at a second rate uni get renumerated…piece of the students future earnings.But then again if they were that good they would simply set up or advise a fund in their ample spare time,quite common stateside.
It’s commonly know as 2 and 20-self policing and everyone’s “happy”.
The carry is most times a capital gain attracting lower tax than say a salary.
An old piece on this,just grabbed it to illustrate/illuminate,but puts forward some off the argument quite well,there have been many alternatives suggested,attempted but it ain’t broken so…
Any amount off reports studies on this topic,but the old get paid last keep the front end fees to a minimum or “skin in the game” works best in my field.
Link to mercer report-not sure if it covered on here ?
Widely quoted “big picture” blog.
@ Michael Hennigan
I have a post for you, but I get weird error messages, for the last 2 days
But then the rich would leave!
@Ernie Ball so long as the Swiss refuse to extradite scumbags it will continue to attract the ugly and obnoxious.
In fact a few irish called it home after NAMA was mooted..Dereck Q,Sean D…one of the most famous irish bookies likes the climate too….
If I’m not mistaken you make your own “tax” deal with the canton.
“The enormously gifted fugitive from justice takes another puff on his cigar and sips his wine and decides to take a dip in his $9.5 million swimming pool. Why not?”
while I do not endorse excessive salaries,
I see the question more on principle.
Who has the right to interfere in contract negotiations of 3rd parties, based on what rules?
Neither the banks nor their managers are exactly endangered species, who deserve outside interference to come to the rescue of helpless victims.
@francis,perma tanned Angelo is the poster boy for this here.
Would you ever go out and buy a few shares:)
“Whereas over half of Americans own equities in some form, only 15% of Germans own shares directly, while a partly overlapping 21% own mutual funds. The omission is all the more striking since Germany’s main share index, the DAX, is at a record high and interest rates are at record lows.”
apologies, I had a reply to Michael Hennigan, on the other thread, on german stock ownership, carefully thinking about it, the dynamics behind them, but hmm, I somehow do not get it posted.
You do realise that if we applied your asinine ratio we would have no professional rugby players left in the country, no golfers, no jockeys
no skilled surgeons etc etc. Life would be really dull and dangerous.
@francis,happens on here I’ve had a few vanish also,personally don’t give a s**t bout Switzerland,refuge off hot and dodgy capital forever.
Finally joining the rest off the civilized world about time too.
what I see with this referendum, is that our Schluchtenscheisser brothers and sister are kind of having enough of being branded as “hot and dodgy”.
They are part of Schengen, which means close operation of police operations with core Europe, notably absent: UK , Ireland.
while I do not like interference in other peoples business, I see this referendum as an important sign.
The Bavarian prime minister went a year ago on a week long “education trip” to “learn” swiss direct democracy, and this was displayed at length in the bavarian TV
@francis,the Swiss still have an awful lot to learn about democracy,a good start would be here!
the bloomberg is not about democracy, but about US access to non-US data, or do I miss something?
@francis link in bloomberg piece.
I claim that I have never cheated one cent of taxes, social contributions, etc.
I have done my military duty, and all other duty to my fatherland and all allies, and beyond.
After 9/11 our NATO flag went up in the US IBM cleanroom class 1 as well.
It was the first time NATO declared Article V
But people here are very worried about the constant bullying and intrusion from non-Schengen entities beyond our democratic control.
@francis,agreed but you did ask,oh the Swiss always complain bitterly whilst hiding dodgy cash about bullying…..
“Nevertheless public opinion in Switzerland is swinging away from past tolerance of banking criminality. As Mark Herkenrath of Alliance Sud in Switzerland comments: “pro-active measures to provide transparency in tax matters are still missing, even though a growing number of citizens and parliamentarians are calling for such measures.”
maybe we bring it back closer to topic,
it is the Swiss, who decided their own affairs.
A referendum, nominally lost, still reflecting to the folks inside, that switzerland doesnt want to be about tax cheating, and confident that they dont have to live off that, in contrast to some other nations.
@francis,they have to decide themselves but this will no longer be tolerated.
“Birkenfeld told authorities how UBS bankers came to the U.S. to woo rich Americans, managed $20 billion of their assets and helped them cheat the IRS”
is this not more about the US bringing US subsidies under control?
like the US closing US tax loop holes about taxing in Ireland /NL?
instead of bullying Ireland.
Why does Germany not seem to have similar problems?
Do I miss something ?
@francis…maybe you missed this:) http://mobile.reuters.com/article/idUSBRE9AK0GT20131121?irpc=932
“I claim that I have never cheated one cent of taxes, social contributions, etc.
I have done my military duty, and all other duty to my fatherland and all allies, and beyond.”
Such brazen absolutes! The blog is delighted to award you the ‘Piigs Iron Cross’ – unfortunately ‘Without the Gold Leaf’ as we are a bit short on the yellow stuff at the mo ….
“You do realise that if we applied your asinine ratio we would have no professional rugby players left in the country, no golfers, no jockeys
no skilled surgeons etc etc. Life would be really dull and dangerous.”
Jonny Sexton (plays in France) gets paid a lot but he couldn’t nail that penalty on Sunday. The money did not put the ball between the posts. Losing again to NZ is dull.
Dysfunctional systems are the real issue whether in banks or surgical settings. Paying the boss whatever without fixing the system won’t change the risks and may even enhance them.
“The role of managers and clinical leaders can be crucial in achieving positive changes in practice, however one danger is that managers may seek simple solutions over evidence – leading them to adopt management techniques that are ineffective or damaging.”
Does that sound familiar?
There are good arguments about paying for performance but dullness doesn’t really come into it. It’s about having effective incentives that reflect the risks involved.
@ D O D,
It does not exactly surprise me that a Frankfurt School guy cannot imagine, that my wording with respect to that could and was actually precise. Please read it again.
@ John Gallaher,
I don’t want to get into a discussion, far away from the thread topic, of how to procede best with tax cheating that did happen. To make qualified statements, would require me to spend significantly more time on the subject. Sorry.
I just want to mention 2 points, why that is a lot more complicated, and certainly not the US just being the good police man of the world.
In the US it is important too, how you obtain information, you base your prosecution on, e.g. “Miranda rights”.
We are getting here more and more the impression, that the US tries to impose their will and interest on others, demanding that others break their laws retroactively, while US government and companies feel they can break the law of the land in other lands at will, e.g.
– Spy activities.
– It needed German police to march in, to enforce German labor laws in German Wal-Mart’s.
– Amazon in Germany is refusing to negotiate with the German union, and what I have seen today, I interpret as trying to hire scabs in Dresden to break pending strikes in Leipzig.
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