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Chief salaries of senior bankers are published in the compensation report every year. An example: In 2022, Ralph Hamers, then CEO of UBS, received a whopping 12.64 million francs. What will happen after the turbulent year 2023 and for Ermotti, the new CEO of UBS, will be announced on March 28.
Until then there are only rumors. And the rumors are often valid regarding pay in Swiss companies, especially non-listed companies. While listed companies disclose wages at the top floors and pay ranges are often known internally, there is still a icy silence on wages at other Swiss companies.
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This article was first published on the paid service of handelszeitung.ch. Blick+ users have exclusive access as part of their subscription. You can find more exciting articles at www.handelszeitung.ch.
Cultural differences lead to lack of transparency
Researcher Anna Sender from Lucerne University of Applied Sciences and Arts knows that it depends on culture: “In the north, in Scandinavia, wages are not a taboo subject. “Employees openly ask their colleagues about their salaries, it’s not a shocking question.” Exclamations of surprise are still heard in this country when someone asks directly about their salary.
Pay transparency helps against discrimination and ensures fairness. First of all, he explains, this leads to wage pressure: “Transparency leads to overcompensation. Low wages are increased, high wages are adjusted. “Contrary to popular belief, total wages do not necessarily have to increase because there are fewer differences between employees.”
The case of one company that has been experimenting with pay transparency for four years shows that it is happening effectively. Patrick Mollet, co-owner of management consultancy Great Place to Work, had his request for a pay rise rejected by his colleagues: “I offered a higher pay rise than my colleagues and this was deemed unfair.”
Team decides on fair wages
Is your own co-owner not getting the salary you want? How does it work? So how does he react? Mollet waves with a smile and explains how we got to this point: “We want to be a transparent company. Just: Three-quarters of our cost pool is fees, so we couldn’t communicate transparently. That’s why we published the fees internally.” This was the first step.
In the second, they asked themselves who decides on wages and wage increases. Because in every company, these problems affect the entire team. Bonuses were also something Mollet had no interest in: “Companies are committed to working together, but ultimately individual achievements are rewarded. This makes no sense.” Today, 25 percent of the profits are distributed to everyone, 25 percent is distributed as dividends and 50 percent is invested in the company. Because: “Simply put, anyone who increases wages reduces profits and therefore the team bonus.”
The result: Everyone should have a say in wages. “The same platform should be available to everyone, not just those aggressively demanding wage increases.” That’s why they implemented “pay proposals”: Everyone enters the salary they want, everyone sees the amount, and discusses it together as a team. An internally formed committee, which changes every year, checks whether fees meet various fairness criteria and then provides information.
And this committee rejected Mollet’s request for a 7 percent wage increase to 155,000 francs. There was a brief setback, but Mollet thinks it’s a fair approach: “The lowest wage has been raised to the level of other employees. “I reduced my talking so that I could get back to the same level as my peers.”
Pay transparency must increase within the company
As with Great Place to Work, living wage transparency is extreme. But today, complete privacy is no longer possible, as researcher Anna Sender knows: “People compare themselves. Satisfaction with wages depends not only on how much I earn, but also on how much I earn compared to my colleagues.” It is the manager’s job to explain why someone earns less or more… And show how someone can earn more.
However, releasing all fees overnight will lead to chaos. Anna Sender recommends that companies first explain the wage system to employees and explain the wage ranges. This means everyone can understand what you have earned and there are no thoughts of jealousy because you can calculate it for your colleagues left and right too. Also, transparency in fees is one thing; But much more important is to talk transparently about events, projects and tasks in the company. Because secrecy breaks down resentment and motivation.
As with Great Place to Work, full transparency is a cultural issue that has been in the works for years. For everyone: Start small. For Sergio Ermotti, this means that his salary will be announced in March. But this secret of all other bankers remains a very well guarded banking secret and, as we know, this secret is not untouchable.
Source :Blick
I’m Tim David and I work as an author for 24 Instant News, covering the Market section. With a Bachelor’s Degree in Journalism, my mission is to provide accurate, timely and insightful news coverage that helps our readers stay informed about the latest trends in the market. My writing style is focused on making complex economic topics easy to understand for everyone.
