Derek Pain: Corporate fat-cat pay reductions> I wouldn't bet on it
Saturday 01 October 2011
Are company directors paid far too much? Politicians think they are and so, I suspect, do the vast majority of small shareholders. But will legislation be introduced to curb the corporate fat cats? I doubt it. For one thing new rules would be almost impossible to police and, in addition, any self regulation is unlikely to succeed because many of the most powerful shareholders in top ranking companies are already enjoying a similar gravy train ride.
You and I may blink in astonishment at some of the money handed out. Investment organisations, like advisory group PIRC, often mount commendable onslaughts at company annual meetings against cash and share packages. But their efforts rarely quell the demands for increased rewards. Why? Because objections cut little ice with the City institutional fund managers that dominate many share registers. Most of them are already enjoying privileged pay packets. Although they represent small savers (through managing pension funds and so on) many obviously feel obliged to support the various remuneration deals. And don't forget, auditors, and other outside professionals such as lawyers, are also richly rewarded. So the City is collectively supportive of the fat-cat mentality.
The pay spotlight is focussed on the top echelons. Yet among smaller companies some large wage demands are approved. It is all part of the money grabbing sentiment that also embraces the likes of pop stars and elite professional footballers as well as many in Whitehall and local government. Yet while the rich get richer the finances of most of us are being squeezed unmercifully.
Some politicians could be accused of political grandstanding. Why single out company executives? Big pay packets are enjoyed by many. Will, for example, council executives be subject to any Westminster-inspired initiative? Wage controls are difficult to enforce. When in the 1970s a pay freeze was introduced, there was a sudden rush to capture new working titles that, of course, embraced higher pay although the job functions remained essentially unchanged.
I suppose the pay row offers a diversion from the turmoil reigning in stock markets. Yet according to Capita registrars, private buyers – although losing some £34bn so far in this year's wounding share slump – have still had the sense to take advantage of lower prices by buying around £1.3bn-worth of stock. It is against such turbulent background that the City's Takeover Panel has introduced new bid rules that are a direct result of the controversial acquisition of Cadbury by US food giant Kraft.
The changes were not expected to graft on any extra protection for iconic – or essential – British companies, but they do offer some help to businesses on the receiving end of bids. Announcements about "preliminary approaches" are likely to become more frequent. One area where controversy and intrigue are likely to remain, however, is when a substantial shareholder is on the share register but not in the boardroom.
Sir Stelios Haji-Ioannou has made his presence felt at easyJet, the group he founded and where his family still has around 38 per cent of the capital. His decision to launch a rival airline could, however, prompt a disconnection.
Joe Lewis, the Bahamas-based billionaire, appears to have snapped up a bar stool at Mitchells & Butlers with his 22.8 per cent shareholding. Two directors are his nominees. M&B has had an eventful time in recent years with the Lewis influence adding to the feeling that something akin to a bar room brawl is taking place at the pub chain. The chairman, Bob Ivell, and chief executive, Jeremy Blood, describe their roles as "interim".
Through his investment company Mr Lewis has tabled a low ball 222p bid and has indicated he could well go to 230p a share. With its revolving boardroom door M&B has probably missed a trick or two in recent years but seems to be performing quite well.
The shares have been in the doldrums. Early last month they were standing at an all-time low, near 200p. Since the Lewis bid approach became known they have displayed some life, reaching 250p or so. Clearly Mr Lewis has no plans to revisit the days when, under the then chief executive Tim Clarke, the shares nudged 900p. But a bid price well in excess of the current one would be more appropriate.
- 3 Alton Towers crash: Four seriously injured and 16 guests trapped as Smiler ride carriages collide
- 4 Ann Summers survey reveals the UK's favourite sex position
Thousands of teenage girls enduring debilitating illnesses after routine school cancer vaccination
Migrants in Kos: Photos show real tragedy after Brits abroad complain of 'awkward' holidays
British tourists complain that impoverished boat migrants are making holidays 'awkward' in Kos
Michael Gove determined to scrap the Human Rights Act – even if Scotland retains it
Threat to scrap Human Rights Act could see UK follow Nazi example, warns UN official
Church of England 'one generation away from extinction' after dramatic loss of followers
iJobs Money & Business
£30000 - £35000 per annum: Recruitment Genius: The UK's fastest growing, multi...
£70000 - £90000 per annum: Recruitment Genius: A Financial Reporting Manager i...
£23000 - £25000 per annum: Recruitment Genius: They win lots of awards for the...
£13500 - £20000 per annum: Recruitment Genius: This nationwide enforcement com...
Day In a Page
In the pretty market town of Bungay, this grade II-listed Mill House is arranged over four floors, offering four bedrooms and three reception areas.
This four-bedroom Edwardian home offers a combination of original features and contemporary design after a renovation by the current owners.
This four-bedroom home offers a vaulted ceiling in a breakfast room that's ideal for summer entertaining with doors that open to the patio and garden.
On the market for the first time in more than 50 years, this six-bedroom home is a project with vast potential - spread over three floors of living space.
This five-bedroom home comes with a range of outbuildings including a large barn which could be converted into a self-contained granny-flat or rental.
Surrounded by rolling countryside, this four-bedroom barn conversion comes with a self-contained, one-bedroom annexe that could serve as an office or a holiday let.
Located near Harrogate town centre, this five-bedroom Victorian terrace is arranged over three storeys while a current study serves as an optional sixth bedroom.
A ground-floor flat in a country house, located a mile from Sway; this two-bedroom home would make an ideal weekend retreat on the edge of the New Forest.
On a popular residential lane in Caterham on the Hill, this four-bedroom family home offers a secluded garden and a convenient location for local schools and public transport.
Just a short walk from Westerham green, this three-bedroom cottage has a light kitchen with exposed brickwork and double doors that lead to a south-facing garden.
In a prime spot opposite the River Thames, this one-bedroom flat has an 18sq ft reception room with glass doors that open out to a private terrace.
Set in the hills above Llanwrda Village, west Wales, this 18th-century three-bedroom farmhouse has holiday-let potential from a separate barn conversion and annexe.
This charming end-of-terrace townhouse is arranged over three floors, with two double bedrooms and a private courtyard garden located at the rear of the property.
Located in the University area, this semi-detached five-bedroom home is arranged over three floors - there's even a rear garden and off-road parking too.
Only a few minutes' drive from the charming town of Marlow, this two-bedroom home sits on the private riverside estate of Harleyford.
This detached four-bedroom home in Middleyard is arranged over two floors, with features that include a wood-burning stove and bespoke oak staircase.
In a row of eight detached Georgian residences, this five-bedroom home offers views of The Sound, Mount Edgcumbe and Cornwall from its impressive veranda and full-length balcony.
If you love cooking for friends this two-bedroom flat - complete with views of the iconic Battersea Power Station and an open-plan kitchen/dining area - will go down a treat.
Located above Grasmere village, this five-bedroom home is arranged over three floors and offers countryside views across Grasmere Lake towards Silver Howe.
Surrounded by the Western fells, this five-bedroom Georgian home retains many original features including panel-plastered ceilings, sash windows and fireplaces.
This six-bedroom home is set amongst three acres of grounds. Currently a large family home, Clift Hill has potential to make a B&B, subject to change of use permissions.
A former period coach house, Glebe Farm Stable is now a three-bedroom cottage with a double car barn, office, kennels and an outbuilding that's currently used as a gym.
Surrounded by woodland, this five-bedroom manor house has plenty of outdoor storage space in the form of three converted loose boxes, two smaller outhouses and a woodstore.
This four-bedroom detached home comes with a double carport, useful workshop, garden and two walkways that offer views of the adjacent countryside.
With space for an equestrian business, a greenhouse for growing your own veg, a wine store and a gym; this five-bedroom home has all the ingredients for a country retreat.
The decked roof terrace of this two-bedroom flat is perfect for summer drinks while large windows and ample storage space make for a light and spacious interior.
Set sail for this four-bedroom farmhouse in Cowes. With five acres of land and an indoor pool, this home oozes character. There is even potential to let a one-bedroom annexe.
Surrounded by approximately 15 acres of grounds, this six-bedroom grade II-listed home has been extensively refurbished yet retains many period features.
This four-bedroom home comes with a two-bedroom cottage and commercial office, with planning to extend, in a stunning courtyard setting.
In a pretty Norfolk village, this four-bedroom family home is surrounded by landscaped gardens, with even a self-contained annex for guests.
A few miles from the seaside at Perranporth, this four-bedroom farmhouse sits amongst nine acres of idyllic grounds - including a lake and two barns used as holiday lets.
This five-bedroom home is arranged over three floors of a converted Victorian hospital, offering spectacular views of the Pentland Hills - only three miles from the city centre.
This four-bedroom detached home comes with grounds that span to approximately 2.5 acres, as well as two large patio areas and a double garage.
This four-bedroom cottage is a Grade II-listed town house, well-located for the thriving market town of Nailsworth.
A four-bedroom apartment on the ground floor of a stunning period property in North Yorkshire, with two kitchens and a large south-west facing garden.
This high-spec two-bedroom home is part of a smart collection of new flats at Beaufort Park and has a large decked balcony that's perfect for summer drinks.
Capitalise on the fabulous views of Trevone Bay by taking two homes and creating one spacious boutique B&B. Just a cliff-top walk from Padstow.
Overlooking a golf course, this six-bedroom Edwardian detached home spans four storeys and retains many period features including the original, operational servants' bells...
On the edge of the city, this six-bedroom home comes with an outdoor swimming pool and a large garage block that has annexe potential.
In a Grade II-listed manor just outside of Bath, this three-bedroom home is arranged on two floors with a skylight in a vaulted roof line.
Open the living room's bi-fold wooden doors to reveal a retro-style kitchen, and a conservatory leading to a paved garden at this three-bedroom home.
A Grade II-listed, four-bedroom home, in a charming Somerset village, with a two-storey studio that could be converted into a holiday cottage
A modern four-bedroom Victorian home, within walking distance to the high street
A luxury apartment in the Gothic mansion of Wyfold Court in Kingwood, offers six bedrooms spread over three floors and a turret
This school conversion, near Stockwell Tube, oozes New York loft style. The one-bedroom flat features double height ceilings and exposed brick work
This six-bedroom Georgian home is on three floors with open fireplaces, a two-oven Aga, an annexe, and cottage gardens with outbuildings and a car barn
High Crest House covers an impressive 9384sq ft, with almost three acres of grounds including a tennis court and summer house enclosed by electric gates
A six-bedroom farmhouse with separate accommodation in converted stables. Situated in the village of Church Aston, within walking distance to the market town
A two-bedroom flat with under-heated walnut floors and bespoke built-in storage. The Tube and Clapham Common are a short stroll away
A refurbished seven-bedroom townhouse with staff quarters, cinema room, superb gym, steam room and plunge pool