Widening Pay Gap Between Executives and Ordinary Workers in Switzerland, According to Reuters

ZURICH (Reuters) – The disparity between the highest- and lowest-paid workers in Switzerland has increased in 2023, with top managers now earning an average of 143 times more than their lowest-paid employees, according to a report released by trade union Unia on Monday.

This latest figure marks a rise from the 139 times disparity recorded in 2022, with UBS, the country’s largest bank, showing the most significant pay gap. The issue of executive compensation at the bank has garnered political attention, notably with Swiss Finance Minister Karin Keller-Sutter criticizing UBS Chief Executive Sergio Ermotti’s compensation of 14.4 million Swiss francs ($16.99 million) for 2023.

UBS defended its compensation practices, stating that employee salaries are aligned with market standards based on role, experience, and location. The bank has implemented a 2.25% increase in total salaries for employees in Switzerland, including those at middle management levels, slightly surpassing the average pay increases in the broader financial sector.

In the report, drug manufacturer Novartis was highlighted as having the second highest salary gap, followed by food giant Nestle. Neither company responded to requests for comment at the time of publication.

For context, in the previous year, the median CEO in Britain earned 120 times more than the national median salary, according to the High Pay Centre think tank. The current pay gap in Switzerland is the widest it has been since 2019 when CEO salaries were 148 times greater than those of the lowest-paid workers.

Unia economist Noemie Zurlinden emphasized the staggering and growing gulf between the highest and lowest earners, stating that income inequality has persisted even as companies are capable of paying more, due to large dividend payouts and share buybacks.

While top earners are enjoying increased compensation, those on lower and middle incomes are experiencing a decline in their purchasing power as real wages stagnate in the face of inflation. Zurlinden argued that the enormous pay differential between CEOs and regular employees is unjustifiable and stressed the need for a fairer distribution of economic gains, especially in an era marked by rising living costs.