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Swedish CEO salaries ‘unacceptable’: union

The CEOs of Sweden's 50 largest companies earn on average 40 times more than an industrial worker, a finding that a union organisation head believes is "totally unacceptable" and requires a "popular uprising" to remedy.

Swedish CEO salaries 'unacceptable': union

The average Swedish CEO of the country’s 50 largest companies earned just over 12 million kronor ($1.8 million) in 2009, equivalent to the salaries of 40 industrial workers, according to Wanja Lundby-Wedin, the head of the Swedish Trade Union Confederation (Landsorganisationen i Sverige, LO).

“Prime Minister Fredrik Reinfeldt has repeatedly asserted that income inequality has not increased since 2006. This is not true,” wrote Lundby-Wedin, along with LO economists Jeanette Bergström and Ola Pettersson, in an opinion piece published in Dagens Nyheter (DN) on Monday.

The trio referred to an LO report released on Monday, claiming it showed that the salaries of the executives of Sweden’s 50 largest companies “stand in a class by themselves in a ‘bureaucratic elite'” consisting of “managing directors, chief economists and other top managers in government and private business.”

LO’s annual review of the difference between the executives’ and industrial workers’ wages have not produced any effect. The gap has increased, although the financial crisis reduced it slightly from 2007 to 2009.

However, it is probably just a blip in the curve, according to LO.

“It is clear that we have not succeeded,” Lundby-Wedin said at a seminar on the power elite’s wages.

When asked if the LO is too toothless, she said, “We cannot be those who determine the directors’ wages.”

According to Lundby-Wedin, the aim is to shape public opinion and create a “popular uprising” against the excesses of the directors.

According to the report, the difference in average wages between workers and the “bureaucratic elite” years from 1950 to 1980 went from the salaries of 11 industrial workers to five.

However, it has grown in the last 30 years and the average salary of the elite in 2009 was eight times higher than an industrial worker’s. In the same time period, the salary of CEOs at large companies fell from the equivalent of the wages of 26 industrial workers to nine, only to increase again to 41.

The abolition of taxes on wealth, inheritance and donations have “very likely” increased the difference between the “bureaucratic elite” and industrial workers, the trio wrote.

The ruling Moderate Party slammed the findings.

“You can see from the statistics, there was an increase under the Social Democrat governments and a peak in 2007, but we only took power in 2006. The increase seems to have stopped,” Anna Kinberg Batra, group leader of the Moderate Party, told The Local on Monday.

“We have also focussed on the greatest inequality: those who have a job and those who don’t. We are lowering the threshold for those with the weakest position. That is the most important,” she added.

On top of that, tax cuts have benefited lower income groups in addition to the highest income earners, Kinberg Batra observed.

“The study shows income before tax, so it is difficult to compare real income. For the lower groups, we have decreased their taxes too for normal or blue-collar workers. It has enabled people to go from benefits to get back to work, improving the incentive to rejoin the workforce,” she said.

Kinberg Batra questioned findings since it appears at the very least, the gap is not increasing.

“More people are at work and the differences between the different groups is diminishing. Our aim is twofold: keeping stable public finances and steady interest rates and getting people into work, whether off benefits, into their first job or from too-low incomes,” she said.

“The level of unemployment is decreasing, I hope this is the result of our policies through lower taxes and active policies such as coaching. People were increasingly leaving the labour market,” Kinberg Batra added, pointing out that Swedish society is quite equal compared to most countries.

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WORKING IN SWEDEN

CHECKLIST: Here’s what you need to do if you move away from Sweden

What authorities do you need to inform before you leave, are you liable to Swedish tax and how can you access your Swedish pension? Here's a checklist.

CHECKLIST: Here's what you need to do if you move away from Sweden

Tell the relevant authorities if you’re leaving for more than a year

If you’re planning on leaving Sweden for more than a year, you will have to let the authorities know. The main authorities in question are Skatteverket (the Tax Agency) and Försäkringskassan (the Social Insurance Agency).

Försäkringskassan

You have to tell Försäkringskassan when you leave so they can assess whether or not you still qualify for Swedish social insurance. As a general rule, you aren’t eligible for Swedish social insurance if you move away from Sweden, but there are exceptions, such as maternity or paternity benefits if you’re moving to another EU country.

This also applies to any family members who move with you – any over-18’s should send in their own documentation to Försäkingskassan about their move abroad. If you’re moving abroad with anyone under 18, you can include them in your own report to Försäkringskassan.

If both legal guardians are moving abroad together, both need to include any children in their application. If one legal guardian is moving abroad and the other is staying in Sweden, you need the guardian staying in Sweden to co-sign your application. If you are the sole legal guardian of any under-18’s travelling with you, you don’t need any documentation from the other parent.

You can register a move abroad with Försäkringskassan on the Mina sidor service on their website, here (log in with BankID).

Skatteverket

If you are moving abroad for a year or longer, you also need to tell the Tax Agency. This also applies if you were planning on moving abroad for less than a year but ended up staying for longer.

If you move to another Nordic country, you will also need to register your move with that country’s authorities if you will be there for six months or more. You’ll be deregistered from the Swedish population register the same day you become registered in another Nordic country’s register.

This doesn’t mean that you’ll lose your personnummer – you’ll still be able to use it if you ever move back to Sweden – but you will no longer be registered as resident in Sweden.

Similarly to Försäkringskassan, you will also need to report any children you are bringing with you, and both legal guardians must sign the form, whether or not both guardians are moving abroad or not.

In some cases, you may still be liable to pay tax in Sweden even if you live abroad – particularly if you are a Swedish citizen or have lived in Sweden for at least ten years. This could be due to owning or renting out property in Sweden, having family in Sweden, or owning a business in Sweden.

You can tell the tax agency of your plans to move abroad here.

Contact your a-kassa, if relevant

If you are member of a Swedish a-kassa (unemployment insurance), make sure you tell them that you’re leaving the country. As a general rule, you have unemployment insurance in the country you work in, so you will most likely have to cancel your a-kassa subscription.

If you are moving to another country with the a-kassa system, such as Denmark or Finland, it may pay to wait until you have joined a new a-kassa in that country before you cancel your membership in Sweden.

This is due to the fact, in some countries, you only qualify for benefits once you fulfil a membership and employment requirement. In Sweden and Denmark, you must have been a member for 12 months before you qualify. In Finland, the membership requirement is 26 weeks.

If you qualify for a-kassa in Sweden before you leave the country, you may be able to transfer your a-kassa membership period over to your new a-kassa abroad and qualify there straight away, but this usually only applies if your period of a-kassa membership is unbroken.

Check what applies in your new country before you cancel your membership in Sweden – your a-kassa should be able to help you with this.

Contact your union, if relevant

Similarly, if you are a member of a Swedish union or fackförbund, let them know you’re moving abroad.

If you’re moving to another Nordic country, they might be able to point you in the direction of the relevant union in that country, if you want to remain a member of a union in your new country.

If you’re moving to another EU country, you may be able to remain a member of your Swedish union as a foreign worker with the status utlandsvistelse.

If you chose to do this, you will usually pay a lower monthly fee than you do in Sweden, and they can still provide assistance with work related issues – although it may make more sense to join a local union in your field with more knowledge of the labout market.

If you don’t want to be a member of a union in your new country and don’t want to be a member of a Swedish union, you should contact your  union and ask them to cancel your membership.

Collect relevant documents regarding your Swedish pension

If you have worked in Sweden and paid tax for any length of time, you will have paid in to a Swedish pension. You retain this pension wherever you move, but you must apply for it yourself.

To do so, you will need to give details of when you lived and worked in Sweden, as well as providing copies of work contracts, if you have them. If you have these documents before you leave Sweden, make copies so that you can provide them when asked.

If you move to the EU/EES or Switzerland, you may also have the right to other, non-work based pensions, such as guarantee pension for low- or no-income earners, or the income pension complement (inkomstpensionstillägg).

Currently, you can receive your Swedish pension once you turn 62 – although there is a proposal in parliament due to raise pension age to 63 for those born after 1961 from 2023, so this may change.

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