Elsewhere

We have a list of companies that don’t listen to their shareholders. On it we include those who do listen to their shareholders.

Let’s face it folks, if this were a racehorse we’d already have boiled it down for glue. And this is, by the time you read this, only Day Two of our little list. Government, bad ideas incompetently applied.

8 comments on “Elsewhere

  1. A list of well-paid jobs and/or sectors would be useful insofar as it tells financial investors and young people (human investors) where to direct their investments for the best returns.

    Most of that is already public knowledge though.

  2. ‘The register lists every company in the FTSE All-Share Index which has suffered at least a 20% shareholder rebellion against proposals for executives pay, re-election of directors or other resolution at their shareholder meetings.’

    Suffered? Annoyed is probably a better word.

    A 20% rebellion? WTF?

    ‘Cummings said the fact that 22% of companies in the FTSE All-Share are included on the list shows that “a significant number of companies need to seriously start listening to shareholders views and acting on them”.’

    Shareholders vote on issues. 20% gets you DOUBLE OUGHT NOTHING.

    Bloke buys 10 shares of X, goes to annual meeting, and stirs up shit. Guardian thinks that’s just grand – companies should listen to these turds! Let the minority riffraff run the company! Cos they agree with the Guardian’s socialist bent.

  3. Mmmm… Shareholder democracy’s a tricky thing. Look down any shareholder register & you’ll find a maze of institutional listings. pension funds, investment trusts, insurance companies nominee names. This is all people’s money being held on their behalf. But the proxies are held by the fund managers. Now look at what the fund managers are being paid. Fund managers would, of course, say that their remunerations reflect the employment market of senior company executives.
    There is, one might say, a very slight conflict of interest. Of course one would be mistaken. Wouldn’t one?

  4. @ bis
    Having in the dim, distant past been a fund manager – and quite a good one until marketing department and HR stitched me up – earning less than 3% of Sir James Hanson’s salary I really, really do not think that our salaries reflected the employment market of senior company executives. The salary of our Chief Investment Manager was a bit nearer but still nothing like the pay of fat cat CEOs. Sure Neil Woodford is now worth £millions, and paid some of them, but most Fund Managers are not and were not.
    Back in those days I wore made-to-measure suits, but that was because I was too *thin* to wear off-the-peg ones.
    I looked at the numbers and decided that Sir James (later Lord) Hanson was worth his pay but Cedric (“the pig”) at British Gas was not.
    There was a slight conflict of interest which I, and my close colleagues, ignored. We voted in what we thought to be the interests of the beneficiaries of the funds we managed.
    Remuneration Committees are the problem – everyone wants a top quartile CEO so each of them sets pay rates just above the then current top quartile mark – which moves up the top quartile mark for the next company’s remuneration committee.

  5. “I looked at the numbers and decided that Sir James (later Lord) Hanson was worth his pay but Cedric (“the pig”) at British Gas was not.”

    My long stint in corporate America showed the same thing. Some execs were well worth the money. Others left me scratching my head, “How did he ever get to be a VP?”

  6. In the (Fortune 1000) US company I worked for, the VPs fetched the coffee – only SVPs and EVPs had any real power.

  7. @john77
    I wasn’t implying fund managers, the individuals who manage funds. were responsible for over-inflated salaries. It is, indeed, those remuneration committees. But fund managers, in the sense of companies who manage funds, also have boards & remuneration committees.
    Given the weight of proxies carried by the institutional shareholders, you’d think they’d be in a position to put a brake on remuneration committee awards. Why don’t they?
    I do take your point about people like James Hanson. There are some CEOs that companies crystallise around. Take them away & it’d not be the same company. Although one does wonder how much more they’re incentivised by telephone number pay. They’d be less of a crystallising force on 2/3 the money? They’d take they’re talents elsewhere? Where? Because companies are also what they do & what is done by all the people in a company. Which brings us to the other sort of CEO. Where a company’s going to perform much the same whoever manages it. As long as their not downright incompetent. (Although downright incompetence has never proved a barrier to CEOs & their accompanying healthy remunerations)
    Incidentally, I’m not a complete stranger to fund management. It was a sort of family business. Why I commenced my working life on the LSE. There’s as much politics, with a small “p”, floating around on the boards of fund management companies as there is in any companies. Or any other field you care to mention. Directors are also on boards of other companies. Often whole strings of them. And there is public choice theory.

  8. Incidentally, should have added that’s there’s little incentive for the fund management sector to pursue the issue anyway. What they’re interested in is the bottom line. How profitable a company is. The remunerations of directors is going to figure as some number well to the right of the decimal point as a percentage. In this sense, the whole issue’s more a public relations matter than financial. But it’s a public relations matter could do much harm to companies, if government sticks its clumsy paw in.

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