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Thursday 25 September 2008
Letters: Bonuses at Lehman's
Enormous bonuses for Lehman's fallen stars
If weekend reports are true that Barclays will pay $2.5bn in bonuses to Lehman bankers in New York, we can expect righteous indignation from shareholders, employees and politicians. The rationale for funding an enormous bonus pool for relatively few individuals is based on historic practices among leading investment banks. While there is a legitimate need to retain talented individuals through the hiatus of Lehman's collapse and acquisition, Barclay's decision is based on a seriously flawed hypothesis.
Recent events have dramatically demonstrated the problems traditional bonus practices have caused. Changes to the calculation, funding and distribution of bonus pools will undoubtedly be in the offing. In the case of Barclays and Lehman, basing a retention bonus pool on a failed model is a lazy approach, and is offensive to the vast majority of investors, customers and employees of Barclays. Surely the bank's remuneration committee – in particular the non-executive directors – must exercise their legal obligations and return these proposals for further consideration.
Ultimately, bonus structures must be based on a fair allocation of long-term returns between individuals and shareholders. In designing such structures, Barclays needs to ask a few hard questions. Will a significant portion of the bonus be delivered in shares? How long will shares be retained before the individual is free to turn them into cash? What adjustment will be made if performance goes south rather than improving?
With such significant sums of shareholders' money being used to attract and retain the fallen stars of the Lehman firmament, Barclays' non-execs have a duty to reassure investors that their money is being spent wisely.
Director, Reward Consulting, Hay Group, London SW1
Brown's credibility is still on the line
Following the protests after Gordon Brown removed the 10p tax rate, he and the Chancellor introduced a one-year package to help many of the people who suffered. Now he has apologised. Meanwhile prices have gone up, hitting poorer people the most.
As he has already apologised Gordon Brown would gain more than he would lose by the reintroduction of the 10p tax rate for the next tax year. If the Chancellor combined this with a 50 per cent rate for very high earners he would get a popularity boost. In fact under present circumstances I do not see how the Conservatives could oppose it without losing credibility.
Taking real steps to reduce, or tax, vast salaries, bonuses and commissions would be seen as fair, not left-wing. The Government's next popularity test may be the Glenrothes by-election but its credibility test will be the Chancellor's autumn statement. Gordon Brown's fine words to conference need to be followed by actions at home, not aspirations for global regulators.
Petts Wood, Kent
Is the Gordon Brown who now stands for fairness and stability the same Gordon Brown who boasted of his light regulation of the City, refused to tax non-dom billionaires and was laid back about huge City salaries as the gap between rich and poor widened, kept the economy afloat by rising volumes of consumer debt as house prices spiralled out of control, and refused to levy a windfall tax on utilities who after making huge profits increased their prices by an obscene amount?
While it is a relief that our cancer patients here in England will finally not have to pay for their prescriptions – something the rest of our "United Kingdom" has enjoyed for years – they still have to pay to park in hospital car parks while getting treatment, and in some cases, bridge tolls and road tolls on their way there.
Scotland and Wales meanwhile have no hospital parking fees, and Scotland no bridge or road tolls whatsoever, so English NHS patients are still paying too much.
There is a simple remedy to all this last-minute tinkering by a prime minister desperate to save his own skin above all else. He must resign and we must be allowed a referendum on establishing an English Parliament.
Crawley, West Sussex
Is the Gordon Brown who used his conference speech to proudly proclaim "My children aren't props, they're people" the same Gordon Brown who has been pictured this week (and most other weeks) visiting schools and playgroups to use other people's children as props for photo opportunities?
So Gordon Brown's children are people, not props and he won't be using them for cheap publicity. So where does his wife stand, then? The Michelle Obama-like intro from Mrs B was reminiscent of the worst excesses of cheap publicity.
Poor old Gordon, he just can't get it right. Who is advising him?
I see that the Prime Minister was introduced to the Labour Party Conference by Mrs Brown. How American, and lamentable. What next? A little flag in his lapel and his hand on his heart for the National Anthem?
Brown's speech: "We will do this. We will do that." That's what I heard when I switched on the radio. One would think that Labour were in opposition, not in charge for 11 years. I turned the windbag off.
Doncaster, South Yorkshire
Bar on midwives makes no sense
I was surprised and disappointed to read about the Home Office's Migration Advisory Committee (MAC) decision to remove midwives from the job shortage occupation list, thus restricting the entry of midwives to the UK from beyond the EU. I entirely disagree with the MAC that there is a lack of evidence of a midwife shortage.
We at the NCT know how important the continuous care and support of a midwife is to women in labour. A poor experience of birth can have a long-lasting effect on women and their families. A Healthcare Commission report showed that more than a quarter of women surveyed in England (26 per cent overall, 28 per cent for first-time mothers) were often left alone and frightened in labour. Experiences such as these are due to understaffing and a general shortage of midwives which has been acknowledged by both the Government and the Royal College of Midwives.
We are also experiencing a baby boom. In the long term, more investment by the Government is needed to retain the midwives we already have and to ensure the training and employment of many more "home-grown" midwives. In the short term it is not logical to restrict the entry of midwives to work in this country.
President National Childbirth Trust, London W3
Booker shortlist will boost sales
Boyd Tonkin, your literary editor, refers to a possible tragic sub-plot over the Man Booker Prize (12 September), and asks: "Is the British audience for ambitious fiction dying off?" As evidence, he gives sales of the long list, which he says represents "a dwindling band of domestic readers" sharing the annual Man Booker Prize passion.
I think Tonkin is wrong to read too much into the long-list figures. The long list represents the judges' first selection from the 114 novels submitted. What counts in sales terms – and always has done – is the shortlist (announced on 10 September). It is far too early to offer sales figures, but of last year's shortlist five of the six titles have sold more than 100,000 copies: these novels, led by the eventual winner, The Gathering, by Anne Enright (which has now sold in the UK and in Ireland over 300,000 copies), were hardly household names (Ian McEwan was, thus his sales bonanza towards the half-million mark will cause no surprise), but the success of Mr Pip, by Lloyd Jones, The Reluctant Fundamentalist, by Mohsin Hamid and Animal's People, by Indra Sinha, was brought about entirely by being first longlisted, then shortlisted for the Man Booker Prize.
Let us all look again at the sales figures for this year's shortlist at year end. I am prepared to bet him a brand new Sony e-book reader that the public will have followed the Man Booker recommendations; they always do.
Literary director, Man Booker Prizes, London, W1
Hamilton ruling harsh but fair
Although the FIA Appeal Court decision to uphold the time penalty imposed on Lewis Hamilton in the Belgian Grand Prix may appear to be harsh and has been criticised as being unfair, the ruling upholds an important general principle of sports law.
On-field – or, in the case of Formula One, on-track – decisions by referees are not subject to appeal before the "courts" of sports bodies, except where the decision was wrong in law or there was malice on the part of the referee. A "court" is not in a position to adjudicate after the event on the application of technical rules of a sport made by officials at the time of competition. Otherwise, apart from doping cases, there would never be a firm winner.
Professor and Fellow, The International Sports Law Centre
The Hague, Netherlands
Heat in the office just gets worse
Doraine Potts is spot on (letters, 15, 18 September). When I left school and joined the office world, I was dismayed at how hot and stuffy our offices were kept. I used to focus my criticism on the middle-aged, because they were usually the most vocal in demanding excessive heating and the shutting of all windows at all times (they could sense the teeniest weeniest draught from 20 yards).
Now, a few decades later, I've joined the ranks of the middle-aged and I feel that offices are now even hotter and even stuffier than they were back then; and still people in shirt sleeves complain of the cold! Normal people plead with them to wear more clothes, but to no avail. Normal people plead to be able to sit near to the few remaining opening windows.
It is in the interests of industry itself to take the lead. Less heating reduces costs. Lower temperature and more airflow increases productivity. Let's stop being bullied by the namby-pambies.
Stow on the Wold, Gloucestershire
Households are constantly being urged to reduce their consumption of electricity in the interests of conserving energy, yet the supermarkets, D-I-Y stores and other shops continue to ignore such requests. To go into places which have continuous lights blazing and deep freezers and chiller cabinets pumping out cold air sends a subliminal message to ordinary shoppers: "Why should I bother at home?" What is the answer?
D A Shearn
Midsomer Norton, Somerset
No magic spell
Surely it would be cheaper and more effective for J K Rowling to get Harry Potter to cast a spell on the lost supporters of New Labour. Throwing money at the party won't work, unlike mud.
I agree wholeheartedly with the simple analysis of Michael Mumford (Letters, 24 September). I Googled "Vince Cable T-Shirt" a few days ago, but with no useful result. Does anyone produce a T-shirt of the great man? The slogan, I feel sure, should be "Vince Knows". I'd buy one. Extra large please.
While the army of physicists waits for the Large Hadron Collider to be fixed, could they turn their minds to explaining the physics behind the fact that every time I put one duvet cover, one sheet and four pillowcases into the washing machine, by the time the wash is finished the sheet and pillowcases almost invariably end up inside the duvet cover?
You report that it cost £6m to police the Kingsnorth power station protest. How can the police justify so much manpower and expense when they are always claiming that they are too short-staffed and overburdened with paperwork to tackle the everyday violent crime and antisocial behaviour which affect ordinary people? Perhaps the officers involved should be prosecuted for wasting police time (and taxpayers' money).
Reader in British Politics
Surely the question is how much it costs the Royal Mint to make pound coins. If the forgers can do it for 20p, and that is cheaper, why not give them the contract, removing all forgeries at a stroke (since they are now the legitimate ones)?
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