French PM ‘inspired’ by Swiss corporate pay curbs
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France’s Prime Minister Jean-Marc Ayrault has said the French “should take inspiration” from Switzerland after the country voted overwhelmingly in favour of a measure curbing corporate salaries.
A staunch socialist and a driving force behind some of France’s more left-leaning fiscal policies, Prime Minister Jean-Marc Ayrault doesn’t seem like an obvious cheerleader for Switzerland’s unique economic model. But since the country passed a law curbing executive pay, Ayrault has adopted a new attitude: Let’s do as the Swiss do.
Voters in Switzerland overwhelmingly backed limiting corporate salaries in a referendum on Sunday, breaking with its reputation as a haven for the world’s super-rich with its iron-clad banking sector and special tax deals. Under the new law, a company’s shareholders will be given a binding vote on executive wages and the practice of golden hellos and goodbyes (bonuses for senior managers when they join or leave a firm) are banned.
An impressed Ayrault applauded the vote, calling it an “excellent moment in democracy where the Swiss have shown the way”.
“Personally, I think we should take inspiration from it,” Ayrault said on Monday as he left a conference on employment at the Elysée palace in Paris.
Over the past ten months, French President François Hollande’s socialist-led cabinet has floated several proposals targeting the country’s top earners – some successfully, others less so. Shortly after Ayrault was named prime minister last May, his government announced plans to begin enforcing salary caps at state-owned or partially state-owned companies that would limit executive pay to 450,000 euros per year, or roughly 20 times the wage of the lowest-paid employee. The measure was due to come into effect in both 2012 and 2013.
The government’s most famous effort to get tough on the wealthy, however, was the president’s failed campaign promise to implement a 75 percent income tax on those earning 1 million euros or more per year. The proposed hike notably riled French actor Gerard Depardieu, who reacted by announcing plans to move to Belgium as a tax-exile.
The legislation was ultimately overturned in late December 2012 after France’s highest legal body, the Constitutional Council, ruled that it was “excessive” and a “breach of equality of taxes”. While the council’s decision came as a blow to the Elysée, Ayrault took the news in his stride, vowing to eventually push the measure through.
But if the prime minister’s comments this week are anything to go by, it looks as though the Swiss have given Ayrault yet another idea as to how to rein in the country’s wealthy – this time not only in the public sector, but in the private as well.