The Swiss Times - Swiss News in English

SLI companies paid their bosses higher salaries and bonuses again in 2023

Salaries and bonuses for the top management of large Swiss companies rose again last year. Although salaries in the millions have been the subject of public criticism for years: The shareholders wave them through.

For 2023, 17 of the 23 companies represented in the Swiss Leader Index (SLI) that have already published their annual report paid their CEOs more than in the previous year. On average, CEO salaries and bonuses have risen by 3.3 percent compared to the previous year, according to an analysis by the news agency AWP.

This continues the trend of steadily rising bonuses that has been observed in recent years and was only broken in 2022, when low share prices in particular reduced the value of share distributions.

Salary doubling for Novartis CEO

The top earner last year was Vasant Narasimhan, CEO of Novartis. His total remuneration amounted to CHF 16.25 million, a new record since the adoption of the rip-off initiative in 2013. As with all CEOs of listed companies, his remuneration consisted of a fixed salary paid out in cash and various bonus components. The latter are often paid out in the form of shares and sometimes with a time delay.

In its annual report, Novartis explains that the CEO's salary last year was almost twice as high as in 2022 by stating that the company had achieved or exceeded all of the targets set in the bonus programs under Narasimhan's leadership.

Criticism of UBS CEO Ermotti's salary

The remuneration of Sergio Ermotti, who took over the helm of UBS again after the emergency takeover of Credit Suisse in April last year, was not much smaller. Ermotti received CHF 14.4 million for his nine months at the big bank. Of this, 2.1 million was a fixed salary. 12.3 million was distributed among the variable salary components.

The level of the UBS CEO's remuneration was met with criticism even from middle-class politicians: FDP party leader Thierry Burkart recently said in an interview that such high manager salaries, which came about thanks to a state guarantee, were "simply a slap in the face" for working people. At the same time, however, the Aargau Council of States member also pointed out that it was ultimately the owners who decided what was a fair wage for the managers' performance.

Shareholders nod bonuses

Meanwhile, there seems to be a broad consensus among owners - i.e. shareholders - that current CEO remuneration is appropriate. When the annual general meetings of large corporations vote on bonus models for management, the approval rates are usually well over 90 percent. And in retrospective votes on remuneration reports, the approval rate is usually somewhat lower, but still well over 80 percent.

On the other hand, however, companies also draw consequences of their own accord if management fails to deliver: If a company shows a weak performance or even stumbles, the red pencil is applied. For example, Philipp Rickenbacher's bonus was cut. Rickenbacher was head of Bank Julius Baer and resigned at the beginning of February due to the losses in connection with the Signa real estate empire. At CHF 1.7 million, he received a total payout that was over 70 percent lower than in 2022.

For the comparison and analysis of CEO remuneration, the salary and bonus information published in the annual reports was taken into account and, where necessary, different valuation methods were standardized.

6 SLI groups not included

Of the total of 29 SLI companies, some have not yet published their remuneration reports for the past year. Specifically, this is the case for Logitech, Richemont, Swiss Life and Sonova.

Schindler and Sandoz were also not included in the analysis: the escalator and elevator manufacturer currently has no CEO. Instead, Silvio Napoli, Chairman of the Board of Directors, manages the company in a dual mandate. The generics manufacturer, on the other hand, has only been listed on the stock exchange as an independent company since the fall, which is why the published figures are not yet comparable with those of other companies.

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