Sunday, 29 May 2011

Problems with shareholder oversight of executive pay

I've been thinking about this issue a bit more, as I suspect it is one that Labour will need to have a proper look at if it wants to make any impact in corporate governance next time around. Just to recap, a frequent retort to any argument in favour of greater intervention in executive pay is that it is a matter between PLCs and their owners (shareholders). Extend this a bit further and the claim becomes that if there was really a problem shareholders would be doing something about it. So below are a few reasons why this might not be the case.

1. Trivial sums & bigger priorities

Some shareholders may take the view that directors might get paid a lot, maybe even too much, but that this is a relatively trivial amount in terms of the overall costs of the business. It's literally not worth bothering with. This is sort of a specialised case of the old asset manager cop-out about corp gov issues - if we were that concerned we wouldn't invest. Particularly if the portfolio manager likes the company management concerns about pay may get downplayed.

2. Unknowable effects

Even if they do feel that executives are paid too much, shareholders may feel that the uncertainty attached to seeking to restrain pay (will talent move elsewhere etc) is too great. It may be safer to grudgingly accept the status quo than to take a stand.

3. Arms race

If you believe that you need to pay the best to attract the best talent, why would you seek to restrain pay? Many asset managers won't hold the whole market, so may feel it makes sense for them to let rem comms open the throttle at companies in which they invest. But obviously, if every asset manager does that....

4. Spread too thin 1 - width

Some shareholders hold thousands of stocks, they simply may not have the time and resource available to tackle pay inflation effectively at a significant number in any year. (This might also make you ponder whether they can really monitor any other aspect of all those companies too, but that's a bigger question!)

5. Spread too thin 2 - depth

Some shareholders may feel that the size of their holding does not justify getting stuck into a company about executive pay. Again the aggregate effect of many investors taking this approach could be problematic.

6. Free rider

One of the most commonly-cited arguments, though I don't find it that convincing, based on the way I've heard asset managers talk. The claim is that some shareholders may feel that they personally don't need to act over executive pay, because others in the market will do so.

7. Conflicts

Another frequently deployed argument. Some asset managers may have mandates from the pension funds of PLCs where they have concerns about pay. Or what if the asset manager is part of a bigger financial services group that does business with them? Having not worked for an asset manager I have no idea how common this is, but again anecdotal feedback suggests it does happen, if rarely.

8. Culture and beliefs

Asset managers work in an industry which is highly paid, and in which economic liberalism is usually unchallenged. Does this mean that individuals working in the sector are culturally and ideologically desensitized to high pay, which in turn affects their decisions?

Not an exhaustive list, and some points are more theoretical than others. For what it's worth I think the earlier ones are closer to asset manager views, based on conversations over the years. Taken together though hopefully it's self-evident why we can't assume relying on the owners (at least as they are currently constituted) to restrain pay will lead to any different outcomes.

In search of a new think tank

Will Hutton's bit in The Observer today (was weak willed and bought it) sort of chimes with what I've been thinking. The labour movement is really lacking good policy ideas in the bit of the world that I'm interested in (ownership, governance, etc). I'm as guilty as the next man for this, but much of our response on the Left to the crisis has been to repeat cherished policies that we already favoured pre-crisis. (Of course the Right have done the same. I quite liked Jesse Norman's little book, but the governance reforms suggested look rather late-1990s vintage.) Or, if we've been really radical, we've gone back and dusted off some old ideas that haven't been fashionable for some time. Massive generalisation, obviously, but you know what I mean.

What we need, I think, is some new ideas. Where I disagree with Will Hutton is that I'm not convinced existing bodies are necessarily doing the job, because they are not really set up to do so. I am coming around to the view that what we really need is some sort of think tank type organisation focused primarily on economic and financial reform. I think we need it focused in this way because I don't think more generalist organisations would be able to grant enough time and resource to do the type of work involved. Also I think a more specialist body could make good links with some of the more interesting and technically-minded bodies already out there.

But it probably needs to be a think tank because it should be proactive in terms of pushing policy ideas too, not just generating them. Indeed I would like to see something emerge that could popularise some good reform ideas in the same way that the TPA has through a steady drumbeat managed to create cynicism about the value of the public sector. As a comparison
in the US there is a grouping called Americans for Financial Reform, which has quite a bit of union backing. From a conversation I had with a mate in the US labour movement, I understand that this was originally set up to lobby for the reform package that came together in Dodd-Frank, but has continued after achieving the main objective.

Anyway, just a brief post to lob this thought out - am interested to hear if anyone else thinks this is a good idea, or not.

* Incidentally, much as I am no Nick Clegg fan the cartoon on the main comment spread is particularly bad - Clegg has shat on the NHS reforms, hur hur hur.

Saturday, 28 May 2011

Back from holiday, first question

Has anyone in the lefty blogosphere covered AFC Wimbledon's promotion? It strikes me as one of those rare examples of an unqualified Good Thing. It's like our own version of Obama getting elected (!) - disappointment must inevitably follow, and we'll wonder what all the fuss was about, but enjoy the brief moment of an important victory against the forces of of stupid reaction.

Saturday, 21 May 2011

Taking a break

Off on holiday for a week. No blogging.

Thursday, 19 May 2011

Limits of responsible investment

Rory Sullivan's new book about corporate responsibility reporting is worth a read. I have to say that the stuff I like best in it is where he is honest about the limitations of responsible investment, because few people are willing to say this stuff publicly. Like...
Even with the emergence of 'responsible investment' as part of mainstream investment strategies, the reality is that the positive outcomes that can emerge from the investor-company relationship are primarily those that are of benefit to companies and their investors: best risk management, better performance reporting and better governance, It is much more difficult for responsible investment to deliver outcomes that are primarily about improved social or environmental performance where there is no business case.
And the important point, as he makes elsewhere, that it simply isn't the case that all ESG issues are material. There's a bit of self-deception in the RI world that ESG issues play out over the long term. Sure, some of them do, but all of them? Is it really likely that all (or even most) issues are material, just over the long term? Not in my view.

And this has implications for public policy:
[P]olicymakers should take a cautious view on the role investors can play. Where there are clear short- and long-term policy drivers or other incentives for companies to take action, investment research and investor engagement can play an extremely valuable role, through encouraging companies to identify risks, establish and effectively implement management systems and processes, set targets and report on performance. In the absence of clear policy drivers or incentives (ie when the business case is limited), investors are unlikely to take these issues into account in their investment research or to press companies to improve their performance on these issues. Expressed another ay, the experience with responsible investment suggests that government needs to ensure that appropriate regulations or prices signals are in place to drive behaviour; in the absence of these signals, investor engagement will inevitably be limited in what it can achieve.
Needs to be said, dunnit?

AFSCME report on mutual fund voting

This is worth a read. The US union AFSCME, with the help of the excellent Fund Votes, has produced a report on which US mutual funds are facilitating executive rent extraction. Here's the blurb:
A new report reveals that the largest mutual funds – including Vanguard, BlackRock, ING and Lord Abbett – are the least likely to use proxy votes to align executive pay with performance. On the other hand, the report finds that many smaller funds tend to vote “against’’ management-initiated compensation proposals, and ‘for’ shareholder Say on Pay proposals. Unfortunately, the pay-enabling influence of the larger mutual fund families greatly outweighs the impact of smaller funds. The report specifically finds that the largest mutual fund family, Vanguard, did the least to constrain executive pay in 2010.
Did I mention that we can't do something similar in the UK because we don't have a mandatory voting disclosure regime?

Wednesday, 18 May 2011

Fascists and revealed preference

Just a quick thought, but if you believe a) that we should base policy on what people do (revealed preference) rather than what they say and that b) economic analysis can be applied to political activity (public choice theory), doesn't that suggest that fascists are right-wing, and/or that they believe they are more likely to succeed if they work with conservatives?

I mean they might claim that they are 'national socialists' or 'beyond left and right', but in practice (revealed preference) fascists historically have allied with conservatives, not the Left, and that's where the overlap in supporters seems to be too. And if fascist politicians are following their own self-interest in their political activity, as public choice theory suggests, they must think that they get more change out of conservatives than lefties too.

I'm not claiming that this proves that fascists are right-wing. In practice people define fascism in terms that ensure that it ends up on the other side, and as a lefty I do think they are right-wing. But if you put a lot of store in revealed preference and public choice theory surely you should be pulled in that direction too.

High Pay Commission 2

So, my thoughts. Rather than simply repeat what is in the interim report, I thought I'd pull out what I think are the most interesting bits. I would encourage people to read it, because there is a stack of useful data in there. But I want to focus on a couple of particularly important points, both of which I agree with.

First, much of what we see in respect of executive pay could be described as unintended of the corporate governance movement, such as it is. In particular the focus on performance related pay has allowed executives to extract ever more money from the companies they run. Because the default position a lot of shareholder adopt is that the amounts don't matter too much provided there is performance linkage they have, consciously, or otherwise allowed this too happen. The multiples of salary available as performance-based rewards have risen higher and higher, meaning that the potential pie has grown. Even a global financial crisis hasn't put a dent in it (look at the rebound in bonuses recently).

As the Commission states, there isn't much evidence that other governance reforms, like the establishment of remuneration committees, have made much of a difference either, and may have contributed to the problem. Again I think this is true. As someone put it to me recently no director wants to think they work at a company that is failing or underperforming, so pay has a function as evidence of success - both to the recipient and the rem comm making the awards. The Commission suggests that reform of rem comms is something they may consider as part of the recommendations, something I would definitely support.

Second, as the report suggests, digging into these issues raises deeper questions about the nature of ownership. Suppose we conclude, for a variety of reasons, that corporate governance reforms and shareholder oversight are insufficient to address executive rent extraction. OK, then maybe the state intervenes in some way, or we give another group, like employees, more say. But if agree this is the right path, one has to question why only pay is in the category of 'too difficult for the shareholders to solve'. As I have been bleating since the crisis hit, these are the threads that are left hanging if shareholders don't act more like owners. Don't be surprised if people start to pull at them.

The only other thing I would add is that the Commission could take a look at the literature on incentives and behaviour, because I think there's plenty of evidence there that performance-related pay is unlikely to be effective in boardrooms in terms of improving (rather than rewarding) performance. This is important because, oddly, what it may mean is that we are essentially giving execs a lot of money on moral grounds (good behaviour should result in extra reward) rather than economic ones.

The Institutional Council of Committees of Shareholder Investors

About a month ago I asked if the (former) Institutional Investor Council (no link yet - I'll explain later) could make it to a year without naming its members. The answer, we learn today, is yes, and indeed the membership of the IIC has remained a mystery for its entire existence, although there is a new name we'll need to get used to. Confused?

Well, today the Institutional Investor Committee issued a press release announcing a guide for companies on underwriting fees. But note that's the Institutional Investor Committee (let's call it IIC2) not the Institutional Investor Council (IIC1). What's the difference you might ask. Well, IIC1 was "established" by the Institutional Shareholders Committee (which comprised the ABI, AIC, IMA and NAPF), though as I have blogged before it doesn't seem to have had much of an independent existence. IIC2 effectively is the ISC, renamed, so as far as I can see IIC2 has been created through the issue of the press release with the Institutional Investor Committee name on it. Already there is a new website.

IIC2 isn't quite the ISC though, because one of the original quartet - the AIC, trade body for investment trusts - has dropped out. This is buried in the bottom of today's release, but is apparently due to "the change in focus of the IIC". This may explain why they've gone with the IIC2 name rather than IIC1, since it may not technically be the same body.

But still it's a surely quite a big deal, so the manner of the non-announcement of the AIC bailing out is perplexing. Imagine the TUC issuing a press release announcing a guide to something, having changed its name - just from that press release onwards - to the Trades Union Council and adding in a footnote to the press release that the GMB is no longer an affiliate. Actually I'm not entirely surprised by the AIC's exit since its name hasn't appeared on any of the underwriting fees stuff, which may give us a clue (I am purely speculating here though).

The net result is that there are now three websites relating to the leadership (ahem) of the institutional investor community - an ISC one, an IIC1 one and an IIC2 one - and a 'senior body' that has less assets behind it than it used to.

IIC2 has announced today that a new advisory council is being formed, and that this will be made up from nominees of the trade bodies. But, exactly a year ago, IIC1 announced that it was forming a nominations committee "to ensure high calibre, representative membership, and the election of a chair". So it looks like a re-announcement (unless IIC1's nom comm did recruit anyone whose name was never made public).

To recap, the pressure on the ISC to reform was because of its failure to provide leadership or really do anything. I don't want to underestimate the importance of the underwriting fees work. But that aside what we seem to have a year later is a much less ambitious body for investor representation, which is itself (due to the AIC dropping out) less representative.

Thing is I bet it goes unchallenged too, cos only saddoes like me follow this stuff.

High Pay Commission

Good blog posts from Janet over at Touchstone, and Michael Meacher on Left Futures. My own thoughts later, you lucky people.

Monday, 16 May 2011

Southwark Lib Dem at Rally Against Debt?

There's an interesting snippet in this article in the Mail:
My young daughters were running round the a tree with the daughter of a woman who told me she was a former Lib Dem councillor in Southwark involved in a group called Liberal Vision, which is for Lib Dems who believe in personal freedom.
Of course there's an ideological overlap between liberals and Tories, and some Lib Dems regard themselves as libertarians, but I still find this rather surprising. Anyone with their eyes open could see that the Rally Against Debt was going to mainly attract the anti-state Right types (TPA, UKIP, IEA) including the crankier types who talk about ZanuLabour, the EUSSR etc. But apparently some Lib Dems think these people are worth supporting.

Fantastic quote from Labrokes

On receiving a 33% vote against its remuneration report:
We have noted the disquiet expressed by some of our shareholders and have recorded it for future reference.
I think that translates as "whatever".

Saturday, 14 May 2011

As I was saying...

Albert Hirschman, hero. Why do I ever entertain the idea that I've had an original thought? The first couple of sentences below from Hirschman (from this) could have easily been written about the promotion of responsible investment over recent years.
"[A]ppeals were often made by reformers who, while fully convinced of the intrinsic value and social justice of the measures they advocated, attempted to enlist the support of important groups by appealing to their "longer term" rather than short-term and therefore presumably short-sighted interests. But the advocacy was not only tactical. It was sincerely put forward and testified to the continued prestige of the notion that interest-motivated social behaviour was the best guarantee of a stable an harmonious social order."

Wednesday, 11 May 2011

A short history of responsible eating

Everybody needs to eat, in order to produce the energy required to live, but historically there have been some significant differences about the process of eating.

For example, early in the history of eating, some people raised objections to the eating of animals. The reasons for their opposition were varied. Some held religious beliefs that led them to the conclusion that eating animals was simply morally wrong. Others had theories of rights and justice that led them to the same conclusion. Others simply felt within themselves that they weren't comfortable with eating animals. But all were principally motivated by the belief that there was something 'wrong' with eating animals. So they decided to set up their own approach consumption of food, dubbed ethical eating, which avoided including animals in their diet.

This did not go without challenge. Some felt that ethical eating advocates were trying to 'politicise' food consumption. Some went further and argued that the advocacy of ethical eating fundamentally subverted the function of food consumption and might lead to to a poor diet and, by extension, poor health. These people opined that ethical eating might even therefore be illegal. However most were willing to tolerate this new group, provided they kept their unorthodox practices to themselves.

As a result the ethical eating movement grew, to the extent that it began to create a demand for services. Ethical eating service providers began to appear, and this became a small but significant market niche. At the same time researchers began to look at the claim that ethical eating would lead to a poor diet and poor health. Surprisingly they found that there was little basis for such a claim, provided that the food was sensibly prepared, and there was even some evidence that not eating animals might lead to a better diet, and better health.

The ethical eating movement began to become more ambitious. Emboldened by the findings that there might be some health benefits to their approach, some advocates began to call for it to become mainstream. Ethical eating shouldn't be restricted to specialist restaurants and shops, it should be available as an option everywhere. Increasingly they argued ethical eating not in terms of the rightness of their approach, but of the benefits to be gained by adopting it. You don't need to believe that eating animals is wrong, they argued, to understand that eating them can be bad for you. Gradually ethical eating products and services began to appear as options in mainstream restaurants and shops.

But ethical eating advocates recognised that they faced a problem of language. The term 'ethical eating' gave the clear impression that such an approach to food consumption was predominantly a values-driven initiative. Various alternatives were adopted, with 'socially responsible eating' popular for some time, though ultimately even this was narrowed down to just 'responsible eating'. Under this label no obvious value judgments were implied, and who disagrees with a responsible diet? More and more restaurants and shops introduced 'responsible eating' options, and increasingly they signed up to industry initiatives, aware that customers may not even enter their establishments unless they were signed up to them (though whether they were actually convinced of the benefits is another question).

At the same time analysis of responsible vs traditional eating became more complex. It turned out that it wasn't quite true to say that 'responsible eating' in general was better for your diet. Rather it was the case that eating some things and avoiding others was probably a better approach. In addition, simply paying a bit more attention to the food preparation process was generally a good idea. As a result mainstream eating adopted minor elements of responsible eating, like not eating too much meat too often, rather than simply avoiding eating animals full stop. Nonetheless responsible eating advocates continue to push their case, and hope that one day they can drop the 'RE' label altogether because it will be incorporated into the mainstream, albeit with some significant compromises with their original ideals.

Now, of course, no-one really argues the case for RE in terms of the rightness of not eating animals, which frankly feels rather preachy and old-fashioned, and even a little bit embarrassing. And in any case where's the need when you can make a case for eating a bit less meat in terms of long-term healthy diet?

Interesting Labour blog

The old politics.

Tuesday, 10 May 2011

Treasure Islands

One of the rare treats about blogging is occasionally getting sent things to read/review. One of these recently was Treasure Islands by Nicholas Shaxson, which is all about tax havens.

It's a longish read at 300 plus pages, and as it's all on the one subject it does require a bit of effort (and I say that as someone who generally enjoys reading textbooks). However it's written in a journalistic style, so that offsets things. If you don't know anything about tax havens this is a decent intro, but it's probably more aimed and getting people fired up about how tax havens operate and the political consequences that flow from this. On these terms it scores.

There's a disingenuous argument frequently deployed that the use of tax havens by big businesses doesn't really matter because all they are really doing is achieving the most favourable tax treatment within the law. (And by extension shareholders shouldn't be interested). Whilst we need to take the core of this seriously, and there are genuine issues about where profits are generated and therefore taxed, this obscures some more troubling issues for shareholders IMO.

First, the fact that tax havens make a point of putting a premium on secrecy should raise a red flag about investee businesses that utilising them. Even if the only intention is to reach the most favourable tax treatment the suggestion in this book is that this will inevitability threaten to reduce accountability. I want to dig into this further, but this seems a sound criticism to me.

Second, there's an interesting parallel between the use of tax havens and incorporation in Delaware. Not just the 'race to the bottom' point, but also the knock-on effects of small jurisdictions hosting very large businesses. These places may not have the local expertise to draw up reasonable rules on their own, so they effectively outsource the thinking to big law firms, consulting firms etc whose clients are the companies. The book argues that the net result is that the rules are drawn up in a way that works to the advantage of the companies. Again, worthy of exploration.

There are some interesting political themes in this book too. First is the overlap between defenders of tax havens and the libertarian right. On an ideological level I can understand this a bit, but there are some quite unpleasant people in this world too. It does make you wonder if some of the more genuinely political types aren't getting used a bit by 'libertarians' who see law and regulation as the enemy because they are, basically, crooks. I'm dimly aware of the online attacks on Richard Murphy (who I assume contributed quite a bit to this book), which I have to date considered to be an entirely political spat. Despite being a generally sceptical type, for the first time I wonder if there is something more to it.

Secondly, there's some interesting stuff in there about man of the moment Maurice Glasman. Anyone who really believes that Blue Labour is some kind of Blairite initiative would be well advised to read this. His campaigning, for example in respect of the Corporation of London, is not exactly in tune with light touch regulation of the City.

Anyway, worth a read, and you can pick up pretty cheap on Amazon now.

Elections titbit

Interesting stats being reported in the Labour twitterverse... Out of Labour's 850ish net gains just under half were wins from the Tories. Bit of a corrective to the idea that we simply won back the North from the Lib Dems.

Monday, 9 May 2011

Consumer rights and self-interest

The bit below, from this, resonates with me.
Consumer advertising comprises a persistent series of invitations and imperatives to the individual to look after himself and his immediate family; self-interest becomes the norm, even duty. The same ethos, albeit propagated for different motives, pervades what is in some respects the anti-market - the consumer movement of Ralph Nader and his followers in the United States and other countries. The individual is urged to secure maximum value for money for himself or herself. The approach is to the individual as maximising consumer, rather than as co-operating citizen.
Actually I think it applies to the approach taken by many in arguing for responsible investment. The emphasis is very much on rational self-interest. Whilst understandable if your only aim is to mainstream ESG issues, and presumably ensure that they influence prices, I can't help feeling that we are giving up a lot if that is the limit of our ambition.

Sunday, 8 May 2011

Those elections

Not much to add. Scottish results should frighten the hell out of us. Shuggy worth reading on this.

In England there are several conflicting things to note. First, clearing out Lib Dems from the North may not add much to our chances of winning a general election, but IMO it does at least claw back some important political ground. This does matter, though winning back councils up north seems to be universally taken for granted. If the LDs had not gone into coalition with the Tories their grip on these places could have got tighter, and this could have caused us big problems in the future (see Scotland for details of assuming historic heartlands always come home). Instead the LDs have knackered themselves as a guilt-free alternative to Labour in areas that won't go Tory.

Second, in the rest of England there wasn't enough progress to make people optimistic in the short term. If you get into the detail there are some cases where we took councils off the Tories, or have pushed councils into NOC and now form the biggest group. The problem in the latter case is that quite a few of these were councils where all seats were up for election. We may tip some more over to us through byelections/defections etc, but for the rest it's four years till we get another crack, at which point the Tories may be much stronger.

That said I am a little bit sceptical about 'we should be doing loads better' arguments. Not in the sense that we don't need to to be doing better in order to be in with a chance of winning, that much is obvious. Rather that we ought to be doing much better given X, Y and Z. I really dislike historical parallels and 'electoral cycles'. So to make an accurate comparison I would compared our position now to the last time we were fighting local and regional elections the year after being booted out after a three-term government in the wake of a global financial crisis. OK?

As for minor parties, it is notable that the BNP is imploding and Respect has all but evaporated. Greens did well, but there maybe some volatility in their council representation from what I've seen in London, and I personally think that a brush with real power will cause them as many problems as it does all minor parties.

Anyway, all this ought to make us focus much more on winning in the South, which has to be A Good Thing. We need to do this a) to win b) because of the SNP, and so to win and c) to start thinking about how we replace the LDs as the opposition in bits of England we aren't usually competitive in, in order to win. This should dispel any notion that Labour is going to tilt significantly to the Left, but I suspect that 'red' Ed figured that out some months ago. Quite exactly where we do go, I am thoroughly unclear about.

One final thought about the LDs, whilst I understand they are in a bind, I think the 'remember we're in power for the first time in decades line' in going to wear thing v quickly now. If I were a left-leaning LD I'd be asking 'so what, if it means we spend 4 years helping the Tories carry out a right-wing programme whilst destroying ourselves in the process?'. Spending four years as David Cameron's prophylactic as the Tories 'engage with' the country before being flushed down the toilet doesn't strike me as much as of a strategy.

Wednesday, 4 May 2011

Big vote against remuneration policy at Xstrata

Look here. Vote against is a bit under 32%, but if you add in abstains looks like the vote in favour is around 60%. Given that Glencore owns about 34% that looks like a majority of the free float voting against to me. Second year in a row too.


This editorial in The Grauniad slightly annoys me:
Otherwise progressive Labour voters who are contemplating a no vote have a special responsibility to think again

I think the Grauniad lost its moral authority to give Labour supporters advice when it printed this:
If the Guardian had a vote it would be cast enthusiastically for the Liberal Democrats.
Not sure why Labour supporters need to listen to a Lib Dem supporting newspaper.

Tuesday, 3 May 2011

A UK shareholder campaign that unions can support

Finally! The responsible investment campaign group Fair Pensions has an excellent initiative on the go - working with investors to encourage employers to consider instituting the Living Wage. More details here, the launch blurb below...
Investors bring remuneration debate ‘to the shop floor’

Investors worth over £13bn are issuing a call to FTSE 100 companies to adopt Living Wage standards across their UK operations. The broad investor coalition, headed by religious groups and philanthropists in the UK and USA, is backing Fairpensions’ JustPay! Campaign. The FairPensions campaign for Living Wages is mobilising both institutional investors and tens of thousands of FTSE 100 customers.

On 2nd May, the coalition of investors co-ordinated by FairPensions is writing jointly signed letters to the CEO’s of each FTSE 100 company asking for Living Wage standards to be applied.

With over 3.5 million workers in The United Kingdom earning under £7 an hour and 53% of poor children living in households with at least one working adult, the attention of shareholder activists is turning to the plight of those at the bottom of the salary scale.

Bill Seddon, Chief Executive of the Methodist Central Board of Finance:

“It is entirely appropriate that the Central Finance Board signs these letters to FTSE 100 companies. We look at the relationships companies have with their employees, suppliers, and service providers. That leads us to consider not only executive pay levels, but also the lowest paid in a company.”

Sister Nora Nash of The Sisters of St Francis Philadelphia, who recently filed a shareholder resolution challenging high pay at Goldman Sachs, said:

“While executive compensation spirals out of control, so does the number of people who suffer from food insecurity throughout the world. Companies have a moral obligation to be accountable, to protect the dignity of the human person and to consider equity and justice for the worker. Living Wages mean that persons who work full-time are able to support their families without charity or government intervention.”

As well as investors, thousands of individuals are set to mobilise their money for Living Wages. Through a unique tool at (which goes live on Friday 29th April) people will call on companies who manage their money (banks, insurers and others) to become Living Wage employers.

Catherine Howarth, Chief Executive of FairPensions said:

‘This mobilisation of ordinary people’s money is a first-of-its-kind event in this country. People are sickened by the ever-growing wage inequality in Britain’s biggest firms but we haven’t had an effective way to make our voices heard until now. The combination of major investors and members of the public working together to bring the remuneration debate down to the shop floor should be irresistible.’

FairPensions and their campaign partners are also set to bring the issue of low pay to AGMs this summer.

Ms Howarth said:

“CEOs and Chairmen of Britain’s biggest companies can expect to be challenged at their AGMs this year. We’re very much looking forward to helping shareholders bring the issue of low pay straight to the top of FTSE 100s.”

Looks like an incentive scheme defeat to me

This here. Check the wording out:
All of the resolutions proposed at the annual general meeting were duly passed. Resolution 12 relating to changes to the long term incentive plan was withdrawn and, accordingly, was not put to shareholders.
What's the betting it was withdrawn because they knew it hadn't passed?

Monday, 2 May 2011

Bad arguments from Lib Dems

John Kampfner has a bad article in The Grauniad. I say bad, because it contains a few questionable arguments. Some examples:
Labour tribalists think they have never had it so good. By Friday, according to their reckoning, hundreds of council seats will have returned to the fold, the AV referendum will have been lost and their public enemy number one, Nick Clegg, will have been humiliated.
Why is it that for may meejah types only Labour has 'tribalists'? The implication is that Labour supporters aren't being 'progressives' if they, you know, try and win seats off the Lib Dems. Presumably al those Lib Dems activists who spent years trying to win council seats, by-elections etc were just seeking to further the Progressive Majority (peace be upon it). But dastardly Labour 'tribalists' didn't simply roll over. Nick Clegg trying to win an election is celebrated as The Liberal Moment, Ed Miliband trying to do the same is tribalism.

As for how to read the polls and election results:
The better Labour performs in these interim indicators, the more reluctant it will be to ask itself the hard questions necessary to return to power.
So doing very well could be dangerous for Labour. Ok. But hang on:
The polls are solid for Labour but, in the midst of a deep recession, it should surely be well ahead.
So not doing very well is bad for Labour too.

But what about the logic of this comment on Labour's polling too. Leave aside the fact that we are not technically in a recession, deep or otherwise. Labour IS routinely ahead in the polls. But why should we be well ahead? In the confused message sent by the electorate last May one thing was clear - they wanted a break from Labour after 12 years, and we got spanked. In what world does it make sense to argue that having just been chucked out after a decade in power Labour should expect to be 'well ahead', especially when many punters see Labour as having mucked up the economy? Sometimes I'm amazed we're still standing.

And how about this:
The more Labour focuses its wrath on the wrong target, the more it will embed a Conservative government.
The logic is all over the place. There is wrath towards the Lib Dems because they put the Tories in power - it was a response to it - but now the response to the action is reframed as causing it. And of course one of the reasons there is so much wrath towards the Lib Dems is because over recent years they have tried to win seats off Labour by pretending to be further to the Left, only to then ally with the Tories to get into power. In any case, it's not as if we are only standing candidates against the Lib Dems is it?

All that said clearly at some point, as Kampfner says, Labour does need to talk to the Lib Dems again, and focus most fire on the Tories. But we can wait until they have indulged in an orgy of tribalism by, you know, trying to win council seats off Labour, and when they've made their minds up where they want to sit on the Left-Right spectrum. Cos at the moment it isn't obvious.