City & Business: Electric pay shockers

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If not Public Enemy No 1, the directorsof the regional electricity companies are pretty universally detested. While ordinary householders have been lumbered with ever rising bills since privatisation, the directors of the RECs have taken enormous pay rises and mountains of share options. The industry watchdog, Offer, has done nothing to brake the gravy train. Professor Stephen Littlechild, the director-general of Offer, who delighted the industry last week with less-onerous-than-expected price caps, says it is none of his business.

And still the excesses go on. Two weeks ago it emerged that Eastern Electricity changed the basis of its executive bonus calculation halfway through last year when it became apparent that executives were not performing well enough to trigger the bonus otherwise.

Then came the revelation that Bryan Weston, the part-time chairman of Manweb, the company serving the North-west, was sitting on a personal profit of almost pounds 1m from a share options bonanza.

And on Friday night it emerged that Denis Cassidy, a director of Seeboard, bought 5,000 shares in the company just three days before the Offer review, with the approval of the Seeboard board.

Seeboard's shares have since powered ahead. There is no suggestion that Mr Cassidy had advance information of Offer's plans. But that is not the point. By giving him the green light to buy shares just three days before the most price-sensitive moment in five years, his fellow directors were guilty of a mind-boggling lack of judgement.

The industry is already a byword for boardroom greed. At this rate it will soon be equally renowned for boardroom fatuity.


The interesting aspect of Barclays' half-year results was not the notorious pounds 1bn profits figure. Much more intriguing is the bank's incredibly shrinking loan-book. Martin Taylor, the new chief executive, is determined Barclays should get off the boom-bust cycle that ends in tears and sour loans. If that means not lending, so be it.

It's a profound change in attitude, especially for Barclays, where the quest for loan growth is deeply engrained in the culture. When NatWest overtook it in asset size in the 1980s, Barclays regarded it as a terrible slight: 'Number One by '91' became the in-house slogan. It achieved its goal, of course, but only by lending billions to construction companies and property developers who, it transpired, were not going to pay the money back.

Curbing loans is easy in recession when demand is lacklustre. The trouble comes in the late stages of recovery, when every loan officer is itching to throw money at the wrong applicants. Mr Taylor will deserve every inch of his reputation if he manages to change this aspect of bank culture.