A Land Where CEOs Have Stopped Smiling

[marmar]

from Too Much: A Commentary on Excess and Inequality:



A Land Where CEOs
Have Stopped Smiling
The Dutch are angry about over-the-top CEO pay, and they're not going to take it any more. Could the Dutch clamp-down on executive excess actually spur action elsewhere?
May 26, 2008

By Sam Pizzigati

The Netherlands now seems to have a new claim to fame. The land of dikes, tulips, and Vermeer may now host the world’s unhappiest corporate CEOs. What’s making the Dutch execs so unhappy? These captains of industry run some of the world’s biggest companies. Yet they're taking home just a quarter of what their counterparts in the United States are making.

The worst part of all: The Dutch people think Dutch executives are making too much. And the Dutch people aren’t just complaining about executive pay. They’re pressing lawmakers to do something. Amazingly, lawmakers are.

The Dutch parliament, observers believe, will shortly enact into law legislation that will heavily tax American-style executive windfalls — and maybe set some global precedents.

Other European nations, news reports indicate, are already taking notice. Earlier this month, in Brussels, European Union finance ministers “applauded” Wouter Bos, the Dutch finance minister who’s leading his nation’s charge against executive excess. The chair of the Brussels session, Luxembourg prime minister Jean-Claude Juncker, called the “bloated payouts” going to corporate executives “a social scourge.”

The legislation that Bos is pushing in the Netherlands will impose a 30 percent tax on all executive severance packages that run over 500,000 euros, the equivalent of almost $800,000. Last year, the CEO of the top Dutch baby food maker exited his executive suite with $124 million, a windfall that outraged the Dutch public.

Before that landmark payout, executive pay reformers in the Netherlands had been content to press corporate boards to disclose more info on what they were paying their top execs. That disclosure, they figured, would help shareholders blow the whistle on extraordinary executive earnings.

But this sunshine strategy hasn’t worked, in the Netherlands and other European nations as well, and angry lawmakers are looking at legislation that specifically targets executive excess. .....(more)

The complete piece is at: http://www.toomuchonline.org/articlenew2008/may26a.html