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There was a decision made in Switzerland on Sunday which gives me hope for the future of business and society and democracy throughout the world.  It is a necessary step for the future of capitalism, because it helps put reasonable restrictions on CEOs and owners of companies from taking company profits, very often gleaned from putting thumbscrews to the working force, and stuffing them in their pockets while telling themselves and everyone else who will listen (or who has to) it is "good business".  No it isn't.  Of course business, that is, "news networks" are barely even running the story.  I saw it on CBS news, and then found it on Google--the first time--the second time I looked for the story using the same search parameters it had been buried.  Obviously most of the world is not as enthused as I am, but they should be, as this is a first step towards getting our free-falling economies under control.  

From The New York Times:


Swiss Voters Approve a Plan to Severely Limit Executive Compensation
By RAPHAEL MINDER (no relation to story's subject)
Published: March 3, 2013

"GENEVA — Swiss citizens voted Sunday to impose some of the world's most severe restrictions on executive compensation, ignoring a warning from the business lobby that such curbs would undermine the country's investor-friendly image.

The vote gives shareholders of companies listed in Switzerland a binding say on the overall pay packages for executives and directors. Pension funds holding shares in a company would be obligated to take part in votes on compensation packages.

In addition, companies would no longer be allowed to give bonuses to executives joining or leaving the business, or to executives when their company was taken over. Violations could result in fines equal to up to six years of salary and a prison sentence of up to three years...  

...Almost 68 percent of Swiss voters backed Mr. Minder's proposals, according to results announced late Sunday...

...Mr. Minder's case was unexpectedly bolstered last month when Novartis, the pharmaceutical company, agreed to a $78 million severance payout for its departing chairman, Daniel Vasella. That set off a political storm and intense criticism from some investors, forcing Novartis to scrap the payout and prompting Mr. Vasella to tell shareholders that it had been a mistake..."

YOU CAN READ THE FULL STORY HERE: [link] retrieved March 5, 2013


No, instead of that turning point in the world of business, THESE are the big stories in today's U.S. news:


Heinz CEO could see $56 million golden parachute
Candice Choi , The Associated Press March 5, 2013

"NEW YORK - Heinz CEO William Johnson is entitled to a golden parachute worth $56 million if he's fired by the company's new owners.

Warren Buffet's Berkshire Hathaway and 3G Capital announced last month they were buying the ketchup maker for $23.3 billion. Pittsburgh-based Heinz disclosed Johnson's deal in a regulatory filing Monday.

The deal lets Johnson walk away with $40 million at any time if he chooses. He would be entitled to another $16 million if the new owners were to let him go.

Johnson is also entitled to a payout of $99.7 million in vested stock and $57 million in deferred compensation benefits that he accrued over his 30-year career with Heinz."
[link] retrieved March 5, 2013


And:


Forbes' billionaires list gets bigger, and richer too
Luisa Kroll and Kerry Dolan, Forbes March 4, 2013

"This year Forbes has uncovered a record 1,426 billionaires. That is 200 more than we found in 2012, another record breaking year. It's also nearly 10 times as many as Forbes pinned down in 1987, the year we began tracking fortunes around the world.

The group is worth $5.4 trillion, an astounding 17 percent jump from a year ago. The average net worth of a Forbes billionaire is $3.8 billion, $100 million more than a year ago. More than two-thirds of the world's richest added to their fortunes. Only 259 from last year's list are poorer than a year ago. Sixty dropped out of the ranks, including Zynga's Mark Pincus and former Chesapeake Energy CEO Aubrey McClendon. Another eight passed away."
[link] retrieved March 5, 2013


WHAT ECONOMIC DOWNTURN HAVE WE BEEN TALKING ABOUT THEN?  The one where the workers are getting paid so little as to not be able to comfortably buy things without incurring insurmountable debt.

It will be interesting to see how Buffet changes the company.  Here's is how I predict he will:  He will explain vehemently to everyone how during this tough time, all workers are just going to have to tighten their belts and accept LESS money and fewer benefits in order for the company to go on.  

(from a UK story in 2007):


Heinz workers defy union and walk out

"...A production worker with 29 years' experience, who asked not to be named, said: 'The lads are really mad about the way we are being treated.

'We have gone along with all the company's changes in terms of shift changes and extra productivity which has helped this place, again, make a massive profit – as it has done for every year I have worked here – but this is the way we are treated.

'Hearing that the managers are going to get a £5,000 bonus, when they are saying ours is going to be cut from about £1,000 to nearer £600, is the final straw.

'Then they are suggesting no sick pay or shift premium for the first three days you are off and cutting the temps' pay rate by 20% – which, if they get away with [it], you can bet they will try on us the following year.'
[link] retrieved March 5, 2013


That is how CEOs have been running companies for the last thirty years as the economy slides BECAUSE there is not enough money in workers' pockets for them to spend, and so they borrow, and that is a whole other pool of sharks.


"The five largest banks in the United States at December 31, 2011 were JPMorgan Chase, Bank of America, Citigroup, Wells Fargo, and Goldman Sachs.[1] In December 2011, the five largest banks' assets were equal to 56 percent of the U.S. economy, compared with 43 percent five years earlier."
[link] retrieved March 5, 2013


This is only going to continue if we DON'T adopt measures like those passed in Switzerland, and here's why:


'Super-Entity' Of 147 Companies At Center Of World's Economy, Study Claims
The Huffington Post Canada   Daniel Tencer, First Posted: 10/24/11 02:37 PM ET Updated: 11/29/11 07:25 AM ET

"A Swiss study appears to have uncovered what anti-capitalist activists have been claiming for years -- that the global economy is controlled by a small group of deeply interconnected entities.

But don't grab a pitchfork and head to the nearest Occupy protest just yet. Systems researchers say this isn't the result of an Illuminati-type global conspiracy, but rather a natural force to be expected.

"Such structures are common in nature," complex systems expert George Sudihara told NewScientist.

According to the study's authors -- a trio of systems researchers from the Swiss Federal Institute of Technology -- the research isn't ideologically motivated. Instead, they say, it's the first attempt at mapping the power structure of the global economy, an effort that may help to prevent future financial crises.

What they found, they say, was an economy so deeply interconnected that its structure is alarmingly susceptible to shocks."
[link] retrieved March 5, 2013  THE SWISS STUDY (a .pdf file): [link] retrieved March 5, 2013


The study is careful to say this is a "natural" occurrence in complex systems and I suppose it is in this case, because Unmitigated Greed DOES seem to be a natural human occurence, perpetuated by interconnected networking and "monkey see, monkey do" social attitudes, just as societal collapse is a natural occurrence.  That doesn't make it admirable OR something to look forward to.  The massive manipulations and financial bubbles created by peoples' greed feeding into them is the basis for all the instability we've been seeing for years and years and big business leaders regularly use steamroller tactics and political influence to keep money pouring in--to their own pockets.

Not everyone is happy about the Heinz takeover:


Investors sue to block Heinz takeover
Kevin McCoy, USA TODAY2:21p.m. EST February 20, 2013

"Investors are attacking the takeover of H.J. Heinz by Berkshire Hathaway and 3G Capital Management, arguing that the deal undervalues the global food giant and rewards company insiders at the expense of shareholders.

Two federal shareholder lawsuits were filed in Pittsburgh, where Heinz is headquartered, on Feb. 15, the day after the takeover was announced for $72.50 per share, a 20% premium to the value of the company's shares at the time.

"The proposed acquisition significantly undervalues Heinz," says the civil complaint filed on behalf of shareholder James Clem. "Due in no small part to the company's recent strong growth, just a week ago the stock hit an all-time high of $61 per share."

Additionally, the lawsuits allege that the proposed takeover resulted from "an unfair sales process" aimed at locking in famed investor Warren Buffet's Berkshire Hathaway and 3G Capital as the only possible buyers.

Heinz board members and management back the deal because they stand to receive more than $400 million for an estimated 5.6 million shares of "illiquid" holdings, the lawsuits allege. Additionally, insiders "will also be handsomely rewarded with millions more in special change-in-control benefits if the proposed acquisition closes," according to the Clem complaint...

...News of the shareholder lawsuits came after the FBI announced that it was working with the Securities and Exchange Commission in the market regulator's investigation of suspicious options trading in Heinz shares the day before the acquisition was announced."
[link] retrieved March 5, 2013


It is such an obvious thing that companies are continuing to be hugely profitable because they are gutting and demoralising, exploiting and eliminating workers at the same time as they are charging more for their products, at the same time as they are paying their CEOs record-breaking salaries, bonuses and severance packages, at the same time as they are spreading out across the globe in an effort to diversify and reduce accountability to national laws.  It is an unsustainable equation and it is long past time we addressed it the way the Swiss have begun to, and the way Iceland has [link].  This is one of the poorest stretches of leadership in world history and we continue to glorify it in our culture and media because we are not looking at the past to see some of the precedences set by our own and other cultures who engage in monopolising profits at the expense of the people (pick an empire, any empire), nor do we look far enough ahead at the dire consequences--social collapse.  

One golden egg seems to be shipping production overseas, and that only leaves a crumbling empty shell at home that is ripe for unrest and conquest.   This is not some crazy dream, it has been happening for decades only nobody bothers to care, and our powerful companies and lawyers and politicians make us think we must knuckle under or go under.  That's a lie.  No matter how much lipstick they put on that pig it has always been a lie.  The truth is companies MUST invest in their workers, not just in their owners, or collapse under top-heavy mismanagement.  It is INEVITABLE.


Why Walmart and Big Retailers Should Pay Their Workers More
Huffington Post POLITICS
Bob Herbert  Posted: 11/18/2012 4:07 pm

"Henry Ford famously decided in 1914 to pay many of his workers the then incredible sum of five dollars a day, which was substantially higher than the prevailing wage at the time.

While that wasn't done specifically to enable Ford's workers to buy his cars (his primary objective was to reduce employee turnover), it did at times have that effect. More important, Ford's innovation, which shocked the industrialists of that era, helped kickstart America's high-wage, high-consumption economy and the creation of its vast middle class.

Nearly a century later, in the midst of a weak economy and rising poverty, my colleagues at Demos, a New York-based think tank, have made a compelling case that Ford's revolutionary approach to industrial wages should now be applied to America's retail sector...

...Retail employees, on the other hand, have been sinking in the quicksand of increased workloads and declining compensation. Productivity among retail workers rose by an average of 0.8 percent per year since 2008 while wages, on average, went down. America's largest retailers, those employing 1,000 employees or more, can well afford to pay their employees a minimum of $12.25 an hour, which is the base that the proposed $25,000 floor would establish.

According to the Demos study, the cost of the wage increases to major retailers would be $20.8 billion, which amounts to about one percent of the sector's $2.17 trillion in total annual sales. But the study also estimates that the increased purchasing power accruing to low-wage workers as a result of the pay raises would generate $4 billion to $5 billion in additional annual retail sales."
[link] retrieved March 5, 2013


Sure there is some risk in what the Swiss are doing.  It creates a new dynamic where shareholders have more input into upper management, but only in making reasonable accountability part of the process.  The main element will be how business reacts because big corporations will start leaning on people because they don't like it when they lose, even though they have been winning at the expense of everyone else for years. This has been enough already.  Being fabulously wealthy is no longer an ideal, because the average person is being made to suffer.  This is no longer a question of the poor only.  We are ready for change and our leaders aren't getting it done.  Now is the time to act.  Call them--they work for you (democracy, remember??)--and tell them to enact laws to restrict pay at the top and increase pay at the bottom.  Cite the Swiss and Icelandic models.  Remind them we won't elect them again if they can't get it done.  I don't care what party you belong to, you will soon be able to party again, not lose your kids' education, your house, your car, your job, your health, and your country.  Yes, it's getting THAT bad, or hadn't you noticed?

I want to take a moment to thank the Swiss people for having the courage to be a true democratic people and not frightened sheep waiting to be shorn again and again and again. GREAT JOB!!!  

:salute::salute::salute::salute::salute::salute::salute::salute::salute::salute::salute::salute::salute::salute::salute::salute::salute::salute::salute::salute::salute:  

:clap::clap::clap::clap::clap::clap::clap::clap::clap::clap::clap::clap::clap::clap::clap::clap::clap::clap::clap::clap::clap::clap::clap::clap::clap::clap::clap::clap::clap::clap::clap::clap:


--J.
  • Mood: Peaceful
  • Listening to: weather
  • Reading: Who I Am
  • Watching: Yes.
  • Drinking: tea

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*vikingjon
Astral Traveller
Artist | Professional | Varied
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Born in Boston, Massachusetts. Moved to Delaware at 6 months. Graduated University of Delaware with a Bachelor of Fine Arts degree. Still a bachelor.
Favourite music is Rock, Folk, Jazz. Favourite literature is Fantasy/Science fiction. Movie buff. Shaman, friend of elves. Urban/rural/aquatic/wild.
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