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CEOs Profit as Workers Suffer from Pandemic, says Union

Some companies gave their CEOs pay rises even though the firms were losing money Keystone / Edgar R. Schoepal

While the Covid-19 pandemic has caused existential hardship for many employees, CEOs and shareholders have “shamelessly helped themselves”, according to a union study.

“The pay gap remains wide open at a very high level,” trade union Unia wrote in its annual pay gap studyExternal link published on Tuesday. The average ratio between the highest and lowest salary in a company was 1 to 137 across Switzerland, it said. Unia examined 37 companies, most of which are listed on the stock exchange.

The biggest difference was once again at pharmaceutical giant Roche, where the lowest-paid employee would have to work for 298 years to earn what CEO Severin Schwan makes in one year (CHF14.6 million, $15.9 million).

Three other CEOs pocketed more than CHF10 million last year: Sergio Ermotti at UBS (CHF13.3 million), Ulf Mark Schneider at Nestlé (CHF10.7 million) and Vasant Narasimhan at Novartis (CHF10.4 million).

The lowest salaries in the companies surveyed amounted to a monthly median of CHF3,939 (with a 13th month factored in). In other words, in half of the companies the lowest monthly wage was below CHF4,000.

“These low wages are barely enough to live on,” Unia said.

CEOs and shareholders

Some companies had granted pay rises to their CEOs even though the firms were losing money, it said. At pharmaceutical company Alcon, for example, the top salary rose 11% year-on-year to CHF7.6 million, despite losses of CHF498 million, according to the study. At Swiss Re, the top salary was CHF6.1 million, even though the company made losses of CHF823 million and cut 14.3% of jobs.

Shareholders also did very well, Unia said. Dividend payments to shareholders rose by around 5% last year. Total payouts (dividends and share buybacks) at the 32 companies surveyed in this category amounted to CHF60.6 billion.

The study also pointed out that 14 of the companies had taken advantage of state compensation for short-time working and at the same time had paid out dividends totalling CHF8.2 billion.

Around a third of employees in the catering and hospitality sectors – industries with low wages – were affected by short-time working last year, according to Unia. Since employees on short-time work usually received only 80% of their wages, this put many workers in an extremely precarious financial situation, it said.

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