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WWhile the former boss of the Royal Bank of Scotland, Fred Goodwin, reluctantly agreed, following the Bank's bankruptcy and nationalization, to reduce his annual retirement income from 555 £ 000 to £ 342,500, he clearly illustrated the excessive amounts of money hidden in boardrooms pensions.
Almost all of the UK's largest companies – and many of them of medium size – entered the 2008 financial crisis by promising to pay a pension of about two-thirds of the last executive salary.
In the case of Goodwin, RBS had initially set aside a pension fund of approximately £ 27 million to pay him an annual pension income of £ 703,000 before the accountant turned banker levied a lump sum 2009 and reduce the annual amount. at £ 555,000.
Former BP chairman Lord Browne was responsible in 2005 when the Texas City oil refinery caught fire, killing 15 workers. He retained his pension, worth about one million pounds sterling a year, when he retired two years later.
Successive governments, under pressure to reduce the glaring inequality between employee and managerial pensions, have so far had only one answer: to limit the tax relief offered to the best paid. At first, the cap had been set at £ 1.8m, before being gradually reduced to the current level of £ 1m.
The idea is that sums raised above the cap result in a punitive tax rate, making it unprofitable to continue saving above that level in a pension.
If it takes around £ 100,000 to buy an annual retirement income of £ 3,500 indexed to inflation, the maximum that a leader can hope to earn with a pension pot of one. £ million is £ 35,000. Obviously, even a manager who fails in a basic task, such as ensuring business continuity (Goodwin) or badessing potential risks to the company's reputation (Browne), thinks they are well worth more than that.
The compensation committees might have told the directors that the government clearly wanted to end the rewards of excessive rewards and that they were therefore sticking to the ceiling. Instead, they bypbaded the cap and broke his mind by allowing them, overall, to replicate the old system by adding cash bonuses to the annual salaries of directors.
Until last year, for example, the Lloyds banking group sent to its managing director, António Horta-Osório, a payment in lieu of a contribution to the pension plan representing 46% of his salary. base of £ 1.2 million. And he was far from being alone to enjoy it.
Then, the Investors Association came to the rescue of the government – even if it would say, rightly, that it is acting on behalf of fund managers and shareholders, also upset by excessive compensation from the board of directors .
After asking companies for more clarity for many years about how and why they are paying senior executives, the AI said it would be appropriate for leaders to receive the same contribution to their pensions than the average worker, either directly in the fund or in the form of payment. place.
Lloyds has reduced the payment of Horta-Osório to 33%. There should be more cuts coming, although Lloyds has not yet specified when this could happen.
Some institutions have gone further. HSBC has announced that starting this year, his salary, John Flint, would be reduced to 30% of his salary, an average of 30% for staff. The insurer Aviva announced to his boss, Maurice Tulloch, that he would receive a pension corresponding to 14% of his salary, against 28% of the former boss Mark Wilson.
The government, despite much discussion about inequality, has not done much in this area. The AI should be applauded for its hard line. May many other companies do the same.
The Disney's Fox deal brings the fight for subscribers to a new level
The completion of the $ 71.3 billion (£ 54 billion) mega acquisition of Fox's film and television badets by Rupert Murdoch strengthened its position as the world's leading media group, while he is preparing to enter the endless war against the rivals of Silicon Valley.
The agreement was reached just days before the launch of Apple's global streaming service. Disney will need all the power of content it can get.
In a nutshell, the agreement brings together the Marvel universe and adds Fox properties, including X Men and dead Pool at the Avengers, Iron Man and Thor, as well as franchises such as Avatar and Extraterrestrial, and television programs including The simpsons, Modern family, 24 and Buffy against the vampires.
Disney is preparing to launch its own entertainment streaming service, Disney +, later this year, and the Fox deal also allows it to control Hulu, the US streaming service whose success includes: The servant's tale.
The Fox deal will bring Disney's television and movie budget to $ 21 billion this year, surpbading the fierce Netflix, which is expected to spend $ 15 billion. Disney will now control 36% of the US box office market, which is worth $ 12 billion a year, more than double its nearest Hollywood rival, Warner Bros. Swallowing Fox has instantly doubled its production of 20 blockbuster movies this year.
Disney has already pulled its content from Netflix in the United States while it pursues an exclusive content strategy, and it is unlikely that it wants to reach an agreement with Apple. With its rival, WarnerMedia is also about to launch a streaming service – including content for HBO and Warner Bros, such as everlasting success. friends, that Netflix has spent $ 100 million to keep one more year – the battle for subscribers will be immense.
Sky's new owner, Comcast, is also poised to join the fray with a global service from NBCUniversal, owner of Universal Pictures. The content is king and the crown jewel's badets will be essential for Disney's streaming service to have enough to make it a success.
Ashley could win the battle but still lose the war for Debenhams
A battle in the council chamber rages for the control of Debenhams. The controversial controversy between Sports Direct boss Mike Ashley and the department store's board, led by former Argos boss Terry Duddy, is proxy war. Behind the scenes, he is struggling with the department's bond creditors, led by US hedge funds Alcentra, Angelo Gordon & Co and Silver Point Capital.
Both parties are trying to protect their investment in a company whose share price has fallen and where trade continues to suffer from widespread publicity about its financial difficulties.
Ashley's latest offer, a £ 100 million offer for Denmark's Debenhams, the Magasin du Nord, was turned down on Friday. This is just the latest of the many ideas he used to try to take control of the process at Debenhams.
The company appears ready to borrow an additional £ 200 million from its existing lenders under a debt-equity refinancing program that will likely annihilate its shareholders, including Ashley.
Ashley's other attempt to take over, asking shareholders to dismiss all but one of the board members and to install him as chief executive officer remains topical. But success in this country could only lead to the erasure of its shareholders, bondholders using their debts under change of control clauses.
But he could finish after all. Clearly, he has trouble digesting House of Fraser, a large, struggling business that requires a lot of investment and management time. Taking it in Debenhams also would only divert his attention from this work as well as his main activity, where hard times on Main Street undoubtedly cause pain.
Debenhams staff and suppliers may have trouble seeing a positive conclusion. Whoever gains control, it is likely that stores will close, jobs will disappear and bills will remain unpaid.
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