Should Top Executives’ Salaries be Capped? Lessons from a Swiss Popular Initiative

Abstract

Should top executives salaries be capped? There is indeed considerable public support for this idea. In Switzerland, for example, an initiative against excessive top management remuneration, was voted on in 2013. Had the federal popular initiative “1:12 − for fair wages” been adopted, the Swiss constitution would have henceforth contained the following: “The highest wage paid by a company must not be higher than twelve times the lowest wage paid by the same company.” This article addresses the main argument for and against such a wage cap from a socioeconomic perspective.