Boy meets cake

1st birthday... that came round very quickly...

Highly-skilled Hands

This is a bit interesting...

Guy Hands, who moved from Kent to Guernsey last April in protest at higher income and capital gains tax rates, says he has "never visited" his school age children since he left the country. They have remained with his wife at their former family home in Kent and they now have to travel to Guernsey to see him.

Neither has he visited his mother and father – and wouldn't unless there was a family crisis: "I do not visit my parents in the United Kingdom and would not do so except in an emergency."

This means, presumably, we could put a rough cash figure on the value Guy Hands attaches to his family. Given that he is (was?) pretty wealthy, the amount of extra tax he would have paid in the UK must be pretty large. So the Hands family can feel proud that they are valued to seven figures at the least, and surely much more. But he must have done some basic calculations and clearly the extra money has a higher value to him that his family's close proximity.

By the by, here's what he said at the time of deciding to move:

“Recent developments in UK policy may well drive global firms and highly skilled individuals away from London at significant cost to the UK economy in terms of lost revenues and lost taxes,” Mr Hands says.

I assume he would count himself as one of those very same highly-skilled individuals. But actually doesn't the mess at EMI raise a slight doubt about this? To many people who are less highly-skilled it might look a bit like he bought something he didn't really understand at the top of the market with a lot of borrowed money. After all, the current CEO says the targets set for the business were all wrong. And Hands himself, via his suit against Citi, seems to be suggesting he was sold a pup. Or more precisely he claims he was pushed into a deal at an inflated price by being led to believe another buyer was circling. Isn't that one of the oldest sales tricks going? A lesser-skilled person might have thought that a highly-skilled individual would spot that kind of thing. So it must be much more complicated than that. And require higher skills.

Chris Grayling exposes police violence

Fresh from his highly successful and completely accurate use of crime figures, which has earned him praise from the UK Statistics Authority (I think that's right?), Chris Graying has just delivered a pitch perfect quote on the stats to BBC News. I just watched it again to make sure I didn't mishear it and he clearly said:

"These are all about real crimes committed against real people in real police stations."

Super slick. Did I spot he had ACAB tattooed on his knuckles too?

Ownership

Just to say that this book is worth a read if you're at all interested in the ownership of companies. I'm about halfway through and finding it really informative. Lots of stuff about alternatives to investor-owned businesses and when and why they do and do not work. At lots of useful background info in there. I had no idea, for example, that companies like Ocean Spray and Sun Maid were agricultural co-ops. That said, it is NOT a book that advocates employee ownership, but it is a pretty dispassionate analytical take on why different types of company ownership emerge (including why they appear in particular industries).

A load of Bolland

I've not posted much this week due to work, being in the middle of buying a house and the rapidly approaching 1st birthday of Powdrill 2.0 (tomorrow). But I have been following/participating in the row over incoming M&S chief exec Marc Bolland's pay deal.

I have nothing too original to add - it's a LOT of money, by buying out incentives at the previous employer the supposed retention aspect of such schemes is destroyed, M&S isn't in a big hole that requires paying through the nose for a 'transformative' chief executive etc - but I have found some of the commentary quite interesting. For example, check out the comments from Wellcome Trust in this report:

"We are getting a bit concerned at the way that management’s attention is being diverted by these complaints. As investors, we have a very clear point of principle that managers' pay should be tied into the long-term investors’ interests, but as far as we can see M&S’ remuneration schemes are very well aligned. We are absolutely not stamping up and down in anger.
"If the company is going to hire the best people, if they are going to take them out of the company they have been working for, then they have to buy them out. That is the way the world works."

I suspect that, despite some of the rhetoric around, actually this is a fairly common view in the City (some analysts I have seen quoted have said basically the same thing).

I obviously disagree - I don't see how you can sensibly argue that pay should be tied to investors' long-term interests AND think that buying out execs' ...err... long-term incentives is the way the world works (which I accept it does, at least in part). These two things pull in opposite directions. Nonetheless at least the bloke quoted is being honest - we don't think it really matters.

Whether it does matter in the bigger scale of things I'm unsure. Some investors appear to sense a return to normal on remuneration, and are willing to go along with it. Some seem to be falling back into the old arguments to excuse any pay deal (they're like footballers, what they deliver in shareholder value far outstrips the cost etc). And yet I can't believe we have gone through the past 2 or 3 years without lots of people asking some pretty serious questions along the lines of 'WTF are we actually paying for?'.

This bit in the FT seems closest IMO:

Asked whether the reason was that management had improved hugely; executives were underpaid in the past; their jobs were more onerous today, or whether executives had collectively exploited market power to raise their salaries, all of the members of the panel agreed that the last possibility was closest to the truth.

So things could still get interesting.

Long overdue plug

For the Unison Active blog, which goes straight into my blogroll. Some good stuff on there about pensions like this bit about Unison's successful action to stop local authorities borrowing from their pension funds. And this bit on infrastructure.

GMB report on public sector pensions

This report (PDF) is bloody ace! Lots of very useful info in there, and a good antidote to some of the rubbish propagated by the Right.