Business Week in Review: Mike Farley, Ivan Menezes, Sir Martin Sorrell, Bob Diamond, Chris Merry and James Murdoch
Sunday 04 March 2012
Mike Farley knows the best way to please investors: fling cash at them. Last Tuesday, housebuilder Persimmon saw shares soar after Mr Farley announced a £1.9bn dividend giveaway following a strategic review.
This might seem a bit of a waste, given the housing shortage that successive governments have tried – and failed – to address. But Farley warned that although Persimmon has the "capacity" to build several thousand more homes than the 9,360 it produced last year, many might not get sold – or not at the high margins housebuilders expect.
Guinness, Smirnoff, and even fine wines – there can't be many cooler jobs than being chief executive at Diageo and Ivan Menezes last week took a huge step towards one day snaffling the role. Currently president of North America operations, he was made chief operating officer last Wednesday and seems now to be an odds-on bet to succeed Paul Walsh.
Sir Martin Sorrell continues to walk on water at WPP, the world's biggest advertising group. He announced last Thursday that pre-tax profit had smashed the £1bn barrier from a £10bn turnover.
...at a loss
Another week, another bank boss in this half of the column. Bob Diamond saw the Barclays brand take a hit after Her Majesty's Revenue beancounters said they’d close two "highly abusive" and "not acceptable" tax schemes.
Barclays prefers the term "tax-efficient" and insists that the schemes comply with the tax code and are legal. Worse still, the Government is applying its decision retrospectively, so Barclays could have to shell-out hundreds of millions of pounds.
Chris Merry wasn't living up to his surname as everyone, except he and his staff at RSM Tenon, were left laughing at one of the most humorous business stories so far this year. On Wednesday, the company admitted there is a £12m hole in its accounts. RSM's board said that it was "confident of the group's ability to implement robust and accurate financial reporting" in the future. That's a relief: RSM is an accountancy firm.
One of BSkyB's biggest investors, Odey Asset Management, said last Thursday that there is "definitely change afoot" – hinting that chairman James Murdoch could be on his way out - a day after Murdoch junior quit as News International chairman.
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