
<p>KEY POINTS</p>



<ul class="wp-block-list"><li>Nearly 2,500 global leaders from business, politics and civil society are expected to take part in a rare springtime version of Davos this week.</li><li>Organizers of the event had postponed the meeting from its traditional January slot over safety concerns amid the coronavirus pandemic. However, in a welcome boost to local residents, the forum’s first in-person event has now returned after a two-year hiatus.</li><li>That’s not to say everyone is happy to see the return of the world’s business and political elite to the Swiss Alps.</li></ul>



<p>The World Economic Forum is trying to fix an image problem.</p>



<p>Nearly 2,500 global leaders from business, politics and civil society are expected to take part in a rare springtime version of Davos this week.</p>



<p>The annual meeting will see movers and shakers convene in Switzerland’s luxury Alpine ski resort of Davos for five days of conversation on issues including Covid-19, Russia’s war in Ukraine and the climate crisis.</p>



<p>Organizers of the event had&nbsp;<a href="https://www.cnbc.com/2021/12/20/davos-world-economic-forum-postpones-meeting-due-to-covid.html">postponed the meeting</a>&nbsp;from its traditional January slot over safety concerns amid the coronavirus pandemic. However, in a welcome boost to local residents, the forum’s first in-person event has now returned after a two-year hiatus.</p>



<p>The&nbsp;<a href="https://www.weforum.org/agenda/2022/05/davos-2022-whos-coming-and-everything-else-you-need-to-know/" target="_blank" rel="noreferrer noopener">theme</a>&nbsp;of this year’s event is “History at a Turning Point: Government Policies and Business Strategies.”</p>



<p>“It means a lot to us. It means a lot to the whole of Switzerland,” Samuel Rosenast, a spokesperson for the local tourism board, said in an interview with CNBC’s&nbsp;<a href="https://www.cnbc.com/tom-chitty/">Tom Chitty</a>.</p>



<p>Rosenast said the event was “unbelievably important” to those residing in Europe’s highest town, estimating that the resort could see a windfall of approximately 70 million Swiss francs ($72 million) in just this week alone.</p>



<p>“Every business is in contact with the World Economic Forum. The people know how important it is,” Rosenast said. “Most people here are looking forward to the World Economic Forum. They are happy that it takes place here again this year.”</p>



<h2 class="wp-block-heading" id="h-a-symbol-of-a-failed-era"><a></a>‘A symbol of a failed era’</h2>



<p>That’s not to say everyone is pleased to see the return of the world’s business and political elite to the Swiss Alps. The event has been sharply criticized in recent years for being&nbsp;<a href="https://fortune.com/2015/01/22/davos-out-of-touch/" target="_blank" rel="noreferrer noopener">out of touch</a>,&nbsp;<a href="https://www.cnbc.com/2018/01/18/is-davos-nothing-more-than-an-overpriced-ineffective-talking-shop.html">ineffective</a>&nbsp;and&nbsp;<a href="https://www.fnlondon.com/articles/davos-is-broadly-irrelevant-there-is-no-case-for-guzzling-jets-and-gallons-of-dom-perignon-20220516" target="_blank" rel="noreferrer noopener">irrelevant</a>.</p>



<p>Three years ago, Dutch historian Rutger Bregman went viral at a Davos panel&nbsp;<a href="https://www.cnbc.com/2019/03/19/rutger-bregman-historian-who-confronted-davos-elite-on-higher-taxes.html">when he called out billionaires for tax avoidance</a>. In a clip that has now been viewed nearly 11 million times, Bregman said that a global failure to effectively tackle tax avoidance was the primary cause of inequality.</p>



<p>“It feels like I’m at a firefighters conference and no one’s allowed to speak about water,” Bregman said at the time. “This is not rocket science … we have got to be talking about taxes. That’s it. Taxes, taxes, taxes.”</p>



<p>More recently, protestors, activists and people on the frontlines of inequality have sought to challenge the WEF over its “<a href="https://inequality.org/research/global-inequality-protest-davos/" target="_blank" rel="noreferrer noopener">empty rhetoric</a>,” accusing Davos of representing “a symbol of a failed era” that should be left behind.</p>



<p>A report published Monday by global charity Oxfam found that 573 people became new billionaires during the coronavirus pandemic — at a rate of one every 30 hours. The brief, entitled “Profiting from Pain,” expects that 263 million additional people will fall into extreme poverty this year at a rate of 1 million people every 33 hours.</p>



<p>“Billionaires are arriving in Davos to celebrate an incredible surge in their fortunes. The pandemic and now the steep increases in food and energy prices have, simply put, been a bonanza for them,” said Gabriela Bucher, executive director of Oxfam International.</p>



<p>“Meanwhile, decades of progress on extreme poverty are now in reverse and millions of people are facing impossible rises in the cost of simply staying alive.”</p>



<p>In his youth, Philipp Wilhelm was one of those protesting the annual gathering of billionaires and political leaders in the town where he was born. Now, however, Wilhelm is the mayor of Davos, and his goal is to deliver a successful meeting.</p>



<p>“I protested during the annual meeting because, for me, it was important to express that it’s really crucial that we solve this climate crisis. And we need to make the world a more just place,” Wilhelm said.</p>



<p>Wilhelm said that he had taken part in protests because he felt it was essential to ensure that everyone arriving in Davos “gets the message that it’s really important to solve these issues.”</p>



<p>Wilhelm said he — and WEF — had changed their positions since his protesting days, adding that he believes he can influence policy more effectively in his current role.</p>



<p>When asked whether it was a concern that criticism of WEF had become too closely associated with Davos given that the town itself has become largely interchangeable with the forum, Wilhelm replied: “No it doesn’t bother me at all.”</p>



<p>“I think it is interesting that people know Davos as a place where people meet and discuss — and I mean it should be controversial. There should be a discussion about what is the right way to improve the state of the world,” Wilhelm said.</p>



<h2 class="wp-block-heading"><a></a>Davos 2022 is ‘one marker in time’</h2>



<p>“The forum’s work is ongoing. The meeting is one marker in time,” said Saadia Zahidi, managing director at the World Economic Forum.</p>



<p>“What we’ve been doing over the last two and a half years — while it hasn’t been visible through a particular meeting — is a set of work that is trying to make a dent on inequality and at the same time also make changes towards addressing one of the biggest existential risks we all face which is climate change.”</p>



<p>When asked whether rising income inequality had become a particular problem for the forum, Zahidi replied: “Inequality is a problem for the world. I think we know that societies that do not combat inequality will have slower growth.”</p>



<p>“And so there has to be an effort that addresses inequality. Now, what does that? Better education, better skills, better jobs, addressing issues like taxation and changing the nature of our economies so that they actually work for people and not just for the few,” Zahidi said. “That is going to be front and center on next week’s agenda.”</p>


Stefan Wermuth | Bloomberg | Getty Images

How Davos became the anti-establishment’s punching bag

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<p>At the ongoing World Economic Forum Annual Meeting in Davos, CNBC International had a conversation with CEO of Barclays, Jes Staley on the banks future plans and possible investments in carbon related products.</p>


World Economic Forum: Barclays CEO Jes Staley on climate change

World Economic Forum: Barclays CEO Jes Staley on climate change, renewable energy & the banks’ future plans

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<p>With hundreds of international delegates and political leaders expected to head to this year&#8217;s World Economic Forum Annual Meeting, how much goes into attending?  CNBC Africa&#8217;s Chris Bishop filed this report.</p>


Davos: The money making circus

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<p>Grace Mugabekazi, curator of the Kigali Hub joins CNBC Africa to speak on their expectations ahead of the World Economic Forum Annual Meeting.</p>


Kigali Global Shapers’ Grace Mugabekazi on importance of attending WEF

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<p>CNBC Africa is joined by Grace Mugabekazi, curator of the Kigali Hub for an update on their campaign to remove visa requirements for Africans across the continent.</p>


Progress made so far on Rwandan youth’s push for visa-free Africa

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<p>While the youth constitute a bigger number of Rwanda’s population, studies indicate that only 5 per cent of them understand the Sustainable Development Goals. How can youth participation in implementation be accelerated.</p>


Success of the SDGs depends on youth engagement

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<p><em><a href="https://www.weforum.org/events/world-economic-forum-annual-meeting-2017">This article is part of the World Economic Forum Annual Meeting 2017</a>. It first appeared on WEF&#8217;s website <a href="https://www.weforum.org/agenda/2017/01/ceo-earns-130-times-average-salary/">https://www.weforum.org/agenda/2017/01/ceo-earns-130-times-average-salary/</a> and is republished with its permission.﻿</em></p>
<p><em>CNBC Africa will bring you full coverage of the World Economic Forum Annual Meeting from 17th-20th January </em></p>
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<p>Now hear this: this is your President-elect speaking. “It’s disgraceful…you see these guys [CEOs] making enormous amounts of money. It’s a total and complete joke,” Donald Trump told CBS News in September 2015. The future President ran successfully, in part by denouncing the status quo in big business, decrying inequality, and promising a better America with jobs for all, an America that would be great again.</p>
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<p>And during the UK’s June 2016 referendum on EU membership, the Leave campaign also attacked so-called “fat cats” and those corporate interests who argued for staying inside the EU. Bankers and business leaders were portrayed as the enemy, extracting excessive rewards for their work while ordinary people suffered. The Leave campaign made their appeal sound like a bid for greater economic justice.</p>
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<p>We will find out in the coming months and years whether these appeals to voters were more than campaign rhetoric. But we should be in no doubt: business is vulnerable to the charge that the gap in pay between those at the top and the rest has grown too large. This attack has potency. It can shift voter sentiment and determine the results of important elections.</p>
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<p>A recent study from the ILO, the <a href="http://www.ilo.ch/global/about-the-ilo/multimedia/maps-and-charts/enhanced/WCMS_537906/lang--en/index.htm">Global Wage Report,</a> found that the top 10% of highest paid workers in Europe together earn almost as much as the bottom 50%. “The payment of extremely high wages by a few enterprises to a few individuals leads to a ‘pyramid’ of highly unequally distributed wages,” the report said. Figures from the FTSE100 index of companies reveal a similar story. Whereas 20 years ago the average CEO was getting around 45 times the pay of the average worker in the business, today that ratio is around 130 times.</p>
<p><img loading="lazy" decoding="async" src="/media/19299817/ranked_wages_597x558.jpg"  width="597"  height="558" alt="Ranked Wages"/>﻿</p>
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<p><a href="http://www.ilo.ch/global/about-the-ilo/multimedia/maps-and-charts/enhanced/WCMS_537906/lang--en/index.htm"></a></p>
<div class="image__caption">The Global Wage Report 2016</div>
<div class="image__credit">Image: International Labour Organization</div>
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<p>That might be reason enough for the remuneration committees of big corporations to reflect on how effectively they are working to restrain excess at the top. But it is not just the cry of populists which should concern them. Prof Michael Sandel of Harvard University warns against what he calls “meritocratic hubris” which, he says, <a href="https://www.theguardian.com/commentisfree/2017/jan/01/themes-of-2016-progressive-parties-address-peoples-anger-in-2017">is “morally corrosive”</a>. “The belief that the system rewards talent and hard work encourages the winners to regard their success as their own doing, a measure of their virtue – and to look down on the less fortunate,” he wrote in The Observer in December. To the losers in this system, the so-called meritocracy looks more like “a ladder whose rungs are growing further and further apart”.</p>
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<p>It is sometimes argued that huge pay at the top is inevitable. Globalisation, competition and technological change have made leadership roles far more important. There is a “war for talent”, and only a few exceptional people are capable of becoming a CEO. There is great demand and limited supply. Of course pay has shot up.</p>
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<h2 class="st__content-block st__content-block--heading">It&#8217;s always been tough at the top</h2>
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<p>But these arguments are largely self-serving, and do not survive much scrutiny. Business has always been international, and there has always been technological change. It has never been easy to be a CEO. The history of the 20th century, with two world wars, hyperinflation, financial crises, the Cold War and the oil price shock, was hardy a period of benign stability.</p>
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<p>The size of a corporation alone does not justify a massive CEO pay package. As Sir Philip Hampton, former chairman of Sainsburys and RBS and now chair at GlaxoSmithKline, has pointed out, arguably the bigger a corporation is the less credit should go to the boss. There is a vast array of senior executives and corporate infrastructure in place to support the business. In any case, good corporate governance requires all significant decisions to be taken by a team of people and not by an individual CEO on his or her own. Why in this case should a CEO receive such a disproportionate share of the rewards on offer?</p>
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<p>The mandatory publication of the pay ratio between the top and the median worker in the business will help shine some light on pay gaps. Under the Dodd-Frank legislation in the US pay ratios are finally coming, to be followed perhaps in the UK once a current consultation process is concluded. This greater transparency will help apply some pressure on boards to exercise restraint.</p>
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<p>The decline of trade unions seems also to have coincided with the steeper rises in executive pay at the top. Reintroducing the voice of employees, via elected representatives, in remuneration committees might also help “ground” the conversation in reality. And of course shareholders could do more to urge restraint. Many have been too passive for too long.</p>
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<h2 class="st__content-block st__content-block--heading">The limits of legislation</h2>
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<p>But ultimately legislation can only do so much. Out-of-control pay at the top is a systemic, cultural problem. It requires all participants to change their behaviour. And those changes will be more effective and long-lasting if people choose to act differently, rather than being forced to do so.</p>
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<p>The gap could be closed by increasing pay lower down the income scale. But the ILO’s wages report reveals that there are no easy or painless solutions to closing the inequality gap. As the report’s author, Patrick Belser, told The Guardian: “In Europe, inequality within enterprises accounts for almost half of wage inequality,” he said. “That tells you just having minimum wages is not going to solve wage inequality.”</p>
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<p>“Responsive and responsible leadership,” the theme of Davos 2017, must mean taking effective action on damaging income (and wealth) inequality. This will require fresh thinking, but also, perhaps, taking another look at some older ideas that have gone out of fashion in the past 30 years.</p>
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<p>According to Ryan Avent, a writer for The Economist and author of The Wealth of Humans: Work and its Absence in the Twenty-First Century, “In a world in which technology makes employment more precarious and less remunerative for many workers, redistribution will need to become much more generous and ubiquitous.”</p>
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<p>As President-elect Trump enters the White House, and the UK government prepares to start its negotiations to leave the EU, CEOs need to reflect on what they can do not only to help their businesses succeed, but to strengthen the societies in which they operate.</p>
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<p>The writer is director of the <a href="http://www.highpaycentre.org/">High Pay Centre</a>, a London-based think-tank.﻿</p>
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World Economic Forum Annual Meeting

How Davos became the anti-establishment’s punching bag

World Economic Forum: Barclays CEO Jes Staley on climate change, renewable energy & the banks’ future plans

Davos: The money making circus

Kigali Global Shapers’ Grace Mugabekazi on importance of attending WEF

Progress made so far on Rwandan youth’s push for visa-free Africa

Success of the SDGs depends on youth engagement

Today's CEO earns 130 times the average salary. We need to talk about this

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World Economic Forum Annual Meeting

How Davos became the anti-establishment’s punching bag

World Economic Forum: Barclays CEO Jes Staley on climate change, renewable energy & the banks’ future plans

Davos: The money making circus

Kigali Global Shapers’ Grace Mugabekazi on importance of attending WEF

Progress made so far on Rwandan youth’s push for visa-free Africa

Success of the SDGs depends on youth engagement

Today's CEO earns 130 times the average salary. We need to talk about this

News Tips

Advertise With Us

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