I have commented before about the interesting democratic process in Switzerland. If 100,000 people get activated about a single issue they can petition for a country wide referendum. This is a way better concept that having politicians argue over ridiculous mandates after a general election …

Today Switzerland is going to the polls to decide if “fat cat” executive pay should be limited to 12 times the pay of their lowest paid employee. The Guardian has the background:

Long-standing rumblings about executive excess were fuelled by the banking crisis and the precarious position of the Swiss bank UBS. But the debate was supercharged this year when the Swiss drug group Novartis agreed to pay its outgoing chairman, Daniel Vasella, SFr72m (£49m). The payment, to persuade Vasella not to use his knowledge to help rival pharmaceuticals, was described as a “golden gag”.

There followed a huge public and political backlash, with the Swiss justice minister, Simonetta Sommaruga, saying the payoff was “a huge blow to the social cohesion in our country” and that payouts on such a scale “undermined public trust in the entire economy”.

Novartis was forced to cancel the payout. But serious damage was done, and in a referendum the following month more than two-thirds of Swiss voters backed a new rule to ban golden hellos and goodbyes.

That was step one. Now the campaign has moved to the regular remuneration of the highest paid:

“In recent years, we’ve seen high salaries get higher while other salaries have stayed at much the same level, especially in terms of ordinary people’s disposable income,” said David Roth, the organiser of the 1:12 campaign. “It has become obvious that something is wrong.” …

What no one disputes is that top executives’ salaries have skyrocketed. … the average salary among Swiss CEOs to the average wage [in] 1984 was six to one. By 2011, it had reached 43 to one.

What is more, said Roth: “The biggest salaries are in the same places as the biggest problems. Take UBS. The state has had to pour money into UBS because of problems caused by the very people who earned the highest salaries. Last year, the bank lost SFr2.5bn – and paid out SFr2.5bn in bonuses.“

UBS shareholders got stiffed. This is a familiar story. This trend has swept most western economies in the last generation. Particularly in the financial sector. ANZ Bank is a good Australian example.

Polls are predicting this Swiss referendum will go down. That’s probably because the 12 to 1 ratio is a significant over-reach. Some number between 30 and 40 might have been a better chance.

There is no doubt that some individuals deliver a significantly greater contribution than the the average. They should be rewarded for it. But if you go to any of the professions where the reward is genuinely for the personal skill, experience and brain-power of an individual, I’m willing to bet that the ratio between the elite and the average would be much lower than it is in big business and finance.

What about medicine, for example? Is it likely the world best surgeons earn more than 20-30 times the average young doctor, or 40-50 times the nurse that attends in their theatres? I’d be surprised.

So why should ratios often way over 200 in the business and finance sector be common? As individuals, many corporate leaders are pretty smart, but as a class they certainly aren’t smarter than top medicos. Not smarter, just greedier!

Why has this happened? The answer, I suspect, is that CEOs are being paid more simply because they can be. Their company boards are too weak, too greedy themselves, or too under the influence of group think to stop it.

It’s small wonder that Mr, Mrs and Miss Average are angry. The fat cats (particularly in finance and banking) really have taken greed to a new level. All in an era when huge numbers of people have lost savings, superannuation value, homes, and jobs.

It will be interesting to see if the Swiss start a reversal this weekend. But if they don’t, one will eventually come. This symptom of growing inequality is too big and too obvious to survive the correction.