Outrage over ‘US-style’ pay for Electrolux CEO

Union representatives for workers at Swedish appliance manufacturer Electrolux have railed against the generous pay package for incoming American CEO Keith McLoughlin.

Outrage over 'US-style' pay for Electrolux CEO

McLoughlin, who starts his new job on January 1st, 2011, is set to receive up to 74.5 million kronor ($10.63 million) in compensation next year, newspaper Svenska Dagbladet (SvD) wrote on Friday.

The labour group Unionen, whose members had to settle for a 0.7 percent wage increase this year given current economic conditions, are angered by the news.

McLoughlin’s monthly salary amounts to just over 800,000 kronor alone. In addition, he is also entitled to a 45 million kronor bonus.

Unionen’s chairwoman at Electrolux, Gunilla Brandt, is shocked that there is plenty of money for McLoughlin while the vast majority of employees were forced to settle for modest salary increase this year.

“The management was very reluctant to provide anything beyond the agreement with reference to how things are going at the company,” she said.

Given the sizeable salary in McLoughlin’s back pocket, Brandt expects a higher pay increase following the next round of wage negotiations.

“My hope is that he opens up his wallet a little more next time,” she said.

The company’s owners justified the bonus McLoughlin will receiving by pointing to the fact that he is from the US, where pension benefits are higher.

However, Brandt refused to accept the argument that a Swedish company must pay higher wages in line with overseas firms to attract directors to Swedish companies.

Financial Markets Minister Peter Norman also spoke out against the sizeable compensation package.

“This is a private company and it is up to the owners to determine the terms for its CEO. However, generally it is obviously not good if the tensions become too great between high and low wages in society and this to me seems a little too high,” he told news agency TT.

Norman did not have an opinion on whether it may have a negative influence on wage negotiations in Sweden.

“The compensation reflects what one has to pay to recruit American managers,” Electrolux Chairman and Investor owner representative Marcus Wallenberg told on Friday.

He said he understands that the compensation can be perceived as high.

“It is important to point out that the pension payment of $6.3 million is a one-time payment and is not distributed to Keith until he retires,” Wallenberg told the newspaper.

However, Electrolux shareholders also reacted negatively to the news.

“It is clearly ridiculous to see how some CEOs are glorified and overrated,” Carina Lundberg Markow, who represents Electrolux shareholders Folksam, told SvD.

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Why Zurich ranks as the world’s most expensive city once again

A new study places Switzerland’s largest city on top in a global league table based on how pricey a city is based on prices for goods and services.

Why Zurich ranks as the world’s most expensive city once again
Zurich's is the world's most expensive city. Photo by AFP

The Economist magazine Intelligence Unit’s Worldwide Cost of Living (WCOL) index, reports the prices of 138 goods and services in about 130 major cities in September 2020.

Zurich, Paris, and Hong Kong share the number 1 spot , followed by Singapore, Tel-Aviv and Osaka.

The report indicated that the Covid-19 pandemic has changed the cost of living in 133 cities around the world since the start of 2020. 

“Of the ten categories covered by this report, tobacco and recreation (including consumer electronics) have seen the biggest price increases since last year, while clothing prices have seen the steepest decline”, the Economist noted.

Prices went up primarily due to currency volatility, supply chain problems, the impact of taxes and subsidies, and shifts in consumer preferences during the health crisis.

Even before the Economist report was published on Wednesday, and regardless of the pandemic, Zurich has been ranking as, or among, world’s most expensive cities. 

READ MORE: Why going on a date is so expensive in Zurich?

For instance, in its Price and Earnings rankings for 2018 — the last year for which statistics have been collected — UBS bank listed Zurich as having most expensive goods and services among 77 surveyed cities.

UBS assigned New York a value of 100, with all other cities measured against that baseline. Zurich scored 116.8 before rent was factored in, meaning it was 16.8 percent more expensive than New York overall. After rent was factored in, Zurich's score was still a high 104.3.

So what are the average prices in Zurich for basic goods and services?

These calculations were done by ETH, a public research university in Zurich, and covers average monthly expenses for a single person. The actual living costs will depend on each individual’ living situation, the costs of health insurance, and personal lifestyle.


Monthly expenses for a single person

Fixed costs Amount in CHF
Accommodation (room CHF 400-​1,000, flat CHF 800-​1,600) 800
Health insurance 300
Household contents/personal liability insurance 30
Telephone connection/Internet/TV and radio licence fees 120
Energy (electricity/gas) 40
Public transport 100
Food, household items, personal expenses Amount in CHF
Food 400
Clothes, shoes, hairdressing, mobile phone, leisure activities 250
Washing, cleaning and personal hygiene items, waste disposal 30
Provisions Amount in CHF
Medical treatment (dentist, doctor, optician, medication), gifts, repairs, small purchases 180
Total amount in CHF 2,250


The total of 2,250 francs would have to be multiplied if more than one person lives in a household, as the cost of health insurance and rent for a bigger apartment would increase.

As an indication, rent for a 4-room flat outside the city centre costs 2,535 francs, while the same size accommodation in the centre is 3,600.

Readers verdict: The best and worst things about life in Zurich

You can see the average prices for goods and services in Zurich in November 2020 here.

Now, let’s not forget that salaries in Zurich are among the highest in Switzerland and the world.

The wages depend on a variety of factors, including indutstry, position in a company, and education level.

However, average monthly net salary is around 6,440 francs.

How does this translate into purchasing power — that is, the ability to buy products and services based on net salary? 

According to the same UBS study, in terms of purchasing power Zurich ranks second in the world. 

So what is expensive to buy in Zurich?

As everywhere in Switzerland, groceries, rent, clothing, restaurants, entertainment, public transportation, and health insurance take the biggest chunk out of a household budget.

On the other hand, electronics and education are less costly than in many other countries. Taxes are lower as well.