Discussion
turbobloke said:
Hol said:
burwoodman said:
I had to go back to page one to see a reference to a mansion tax. Typically way off topic....
missed that one. To Hol- is DA, Dumb Ass or some other insult directed at moi?
Edited by burwoodman on Tuesday 11th November 11:46
burwoodman said:
turbobloke said:
Hol said:
burwoodman said:
I had to go back to page one to see a reference to a mansion tax. Typically way off topic....
missed that one. To Hol- is DA, Dumb Ass or some other insult directed at moi?
Edited by burwoodman on Tuesday 11th November 11:46
DA = DonkeyApp who has gone off the reservation a little.
Im just not on first name terms with him, so perhaps 'Mr A'.
Hol said:
No, not directed at you. (Unless you want to be a District Attorney or Dartford Postcode?)
DA = DonkeyApp who has gone off the reservation a little.
Im just not on first name terms with him, so perhaps 'Mr A'.
DA = DonkeyApp who has gone off the reservation a little.
Im just not on first name terms with him, so perhaps 'Mr A'.
Technically, just responding to Cranked's earlier post where we have a long standing discussion that he believes granting additional rights to shareholders that they in fact already have but choose to throw away will lead to a revolution in the boardrooms, in contrast to my view that at best it will change nothing as underlying shareholders have no interest in having any say and pay vast sums so that others use their rights for their own purpose and at worst will in fact make the current situation worse.
Banning proxy voting would solve the problem overnight, instantly but the industry seems to be backing a change that gives them more power as opposed to less. Which is not surprising.
The link to mansion taxes is pertinent due to the ever growing commoditisation of property.
How do you propose to let every Mr Smith or Mrs Jones who have a pension pot that (along with Miss Potts, Dr Watson's and thousands of others pension money) is partially invested in those shares - have an individual say in how they vote in every blue chip company decision.
1. Smith, Jones etc, won't really want to pay for the privilidge of doing so, for each and every decision as their pension pot's have been taxed to death/reduced in value by good old Gordon Brown.
2. Pension funds are also not fully transparent. legally Mr Smith does not actually own the underlying shares, otherwise he would get tax relief based on the returns of each.
I see where your moral compass is taking you, but if that ability realy existed, it would be better used in parliament, to direct MP's to vote as their constituants wanted.
1. Smith, Jones etc, won't really want to pay for the privilidge of doing so, for each and every decision as their pension pot's have been taxed to death/reduced in value by good old Gordon Brown.
2. Pension funds are also not fully transparent. legally Mr Smith does not actually own the underlying shares, otherwise he would get tax relief based on the returns of each.
I see where your moral compass is taking you, but if that ability realy existed, it would be better used in parliament, to direct MP's to vote as their constituants wanted.
Edited by Hol on Tuesday 11th November 13:51
DonkeyApple said:
crankedup said:
DonkeyApple said:
crankedup said:
DonkeyApple said:
crankedup said:
How many Directors have been suspended now? Resting on laurels/sleeping on the job or just plain incompetence.
I'd say desperation. Saturated domestic market, unable to expand overseas and no longer being the goto cheap supermarket has led to the desperate tactic of pissing about with accountants to try and meet shareholder expectations and demands. It has been seen so many times before when a firm is bid up to carry a sector premium. Add in share incentives to accelerate the issue.
Check out Quindell if you want a real laugh/cry re directors/accounting and shareholders.
For years I have suggested that Boardrooms have been too powerful and their self appraisals leading to hyper inflated remuneration packages. Far to easy to satisfy shareholders with easily gotten profits during the 1980's - 2000, now we will see the quality, or lack of, in the Boardrooms.
The simple fact is that the shareholders put the board in place and set the rules and then if the board fails they are replaced.
What most people don't understand is who the shareholders are or what their objectives are.
The Tesco's board will carry the can and be replaced as much as required.
The next stage of reformation which is under review is that of the major shareholders or block holders, pension funds for example. These people have sat back and watched extraordinary recommendations nodded through, this has to change, but it will not happen overnight, obviously. It is an inherent city business culture that has festered for decades, only the 2008 financial crash has opened the eyes outside of the City of just how rotten systems are.
yes the Tesco Board will carry the can, if it is found that fraud has indeed taken place then personal ramifications should follow.
You rightly mention that it is the shareholders that appoint the Board Members, these Members are always recommended for approval by existing Board Members. Its true to say that the average shareholder will go along with the recommendations within the annual reports. Many will say as long as the shareholder gets some profit from the Company that is all they care about. Well certainly I would not want to invest with any Company incapable of making profit, unless a long term business plan was asked for approval that was optimistic of turning around said Company. But that's all part of an investment and why Board Members are paid for results, too many Companies are now turning in losses or lowering profits, time to bail I guess. If a Board fails perhaps those earlier bonus payments should be recovered, although as we know many bonuses are now set with the provision of success rates of ambition and achievement being agreed and then brought to fruition.
Well that's ideal World even if it transpires the journey concludes at a halfway house it will have been a vast improvement on what has gone before.
The fact of the matter is that you can give whatever rights you like to shareholders but the percentage of free held stock in any listed company is irrelevant.
All you do with this legislation is hand more power and control to the groups who are nominated by the shareholders to act on their behalf. Ie the pension and investment managers. The one group of people who if you actually want to clean up the equity markets you must be removing authority from.
But no one has worked that out yet because the Little Englander mentality makes people think they would be getting control when in fact the whole problem is that they actually pay massive excess amounts to voluntarily throw all control away.
The board is irrelevant. It is put in place by the fund managers (ie shareholder collective). If there are failures then it gets blamed and replaced. At the other end the actual individual shareholders carry all the risk. Sitting in the middle are the real controllers. They have no risk, can replace whoever they like and dictate to the shareholders what will be done. At the same time they force the board to outperform while stripping the outperformance as fees and hidden costs before it gets to the shareholder.
It is a wonderous merrygoround of milking of idiots. And those idiots not only think that demanding more shareholder rights will help them when obviously it will enslave them even further but they can be steered into frothing about bad board members and forget all about the fact that they are systematically being rinsed while also carrying all the risk.
Fully agree, it is an extremely difficult job in introducing regulation in an attempt to clean up. Likely why its been allowed to go unhindered for so many decades.
Thanks for calling me an idiot! the point is either to have a go at regulating or let things continue as they were. Allowing to continue is not an option. The major problem is embroiled into an 'old boys club' which has to be broken.
Some C.E.O. have been pushed out by shareholders votes recently, for better or worse, at least this sends a signal.
The Boards must learn to play a straight bat with shareholders, like be honest and open.
DonkeyApple said:
Hol said:
No, not directed at you. (Unless you want to be a District Attorney or Dartford Postcode?)
DA = DonkeyApp who has gone off the reservation a little.
Im just not on first name terms with him, so perhaps 'Mr A'.
DA = DonkeyApp who has gone off the reservation a little.
Im just not on first name terms with him, so perhaps 'Mr A'.
Technically, just responding to Cranked's earlier post where we have a long standing discussion that he believes granting additional rights to shareholders that they in fact already have but choose to throw away will lead to a revolution in the boardrooms, in contrast to my view that at best it will change nothing as underlying shareholders have no interest in having any say and pay vast sums so that others use their rights for their own purpose and at worst will in fact make the current situation worse.
Banning proxy voting would solve the problem overnight, instantly but the industry seems to be backing a change that gives them more power as opposed to less. Which is not surprising.
The link to mansion taxes is pertinent due to the ever growing commoditisation of property.
Will it make a difference to how Boardrooms operate, possibly and with strong regard to Boardroom remuneration, which is really the crux of the matter in the discussion and always has been for me and other shareholders that I speak with.
D.A. represents a POV that suggests that the new regulations will not make any material difference to the status quo. My head tells me that may be the case but my heart tells me otherwise, unless changes are made dissatisfaction will continue to fester imo.
With Government pushing on with pensions reforms the question of fund managers actions or inactions must come under closer scrutiny. Individuals paying into pension funds will surely want to know how their investment is doing?
crankedup said:
Will it make a difference to how Boardrooms operate, possibly and with strong regard to Boardroom remuneration, which is really the crux of the matter in the discussion and always has been for me and other shareholders that I speak with.
D.A. represents a POV that suggests that the new regulations will not make any material difference to the status quo. My head tells me that may be the case but my heart tells me otherwise, unless changes are made dissatisfaction will continue to fester imo.
I just don't see the issue.D.A. represents a POV that suggests that the new regulations will not make any material difference to the status quo. My head tells me that may be the case but my heart tells me otherwise, unless changes are made dissatisfaction will continue to fester imo.
Part of my day job involves understanding executive comp for FTSE companies.
99% of retail investors don't have a clue how to understand even the simple stuff about how C-suite guys get paid.
They just get sucked into the politics of envy forced on them by the media when Sorrell earns >£10m after the share price doubles.
And frankly, whinging about someone getting well paid after DOUBLING your investment seems sour grapes to me.
Sure you want remuneration set up such that frauds such as Tesco are discouraged but if you get paid on the basis of an artificially inflated share price owing to fraudulent behaviour you can claw back the relevant bonus.
IME the vast vast majority of CEOs and CFOs etc... have huge proportions of their net worth tied to either direct ownership in the company through shares or options AND/OR highly relevant KPIs such as PBT or operating profit.
People get upset that these inevitably very rich guys stay rich even if the company heads to zero.
That is because they were very rich BEFORE they got involved in the company.
You can't force them to mortgage their house and buy shares.
You can't pay them zero salary.
In any case the disincentive to commit fraud should be the threat of prison more than financial ruin.
Other than a couple of examples, the only time shareholders complain about remuneration is after the shares fall which often isn't anything to do with the CEO or their remuneration.
crankedup said:
I did mention about the pension fund managers sitting back as they have done for decades and this is being addressed right now.
Fully agree, it is an extremely difficult job in introducing regulation in an attempt to clean up. Likely why its been allowed to go unhindered for so many decades.
Thanks for calling me an idiot! the point is either to have a go at regulating or let things continue as they were. Allowing to continue is not an option. The major problem is embroiled into an 'old boys club' which has to be broken.
Some C.E.O. have been pushed out by shareholders votes recently, for better or worse, at least this sends a signal.
The Boards must learn to play a straight bat with shareholders, like be honest and open.
We are all idiots as we all have pensions. Fully agree, it is an extremely difficult job in introducing regulation in an attempt to clean up. Likely why its been allowed to go unhindered for so many decades.
Thanks for calling me an idiot! the point is either to have a go at regulating or let things continue as they were. Allowing to continue is not an option. The major problem is embroiled into an 'old boys club' which has to be broken.
Some C.E.O. have been pushed out by shareholders votes recently, for better or worse, at least this sends a signal.
The Boards must learn to play a straight bat with shareholders, like be honest and open.
What do you think about banning proxy voting? That would prevent shareholders from sure ending their rights? But the reality is that it will never change as the majority of pension holders have no understanding as to what they are doing.
Hol said:
How do you propose to let every Mr Smith or Mrs Jones who have a pension pot that (along with Miss Potts, Dr Watson's and thousands of others pension money) is partially invested in those shares - have an individual say in how they vote in every blue chip company decision.
1. Smith, Jones etc, won't really want to pay for the privilidge of doing so, for each and every decision as their pension pot's have been taxed to death/reduced in value by good old Gordon Brown.
2. Pension funds are also not fully transparent. legally Mr Smith does not actually own the underlying shares, otherwise he would get tax relief based on the returns of each.
I see where your moral compass is taking you, but if that ability realy existed, it would be better used in parliament, to direct MP's to vote as their constituants wanted.
Agree 100%. It is exactly why giving extra rights to shareholders will never lead to what people seem to claim it will. It serves no purpose other than to exacerbate what is an unresolvable situation. But we do know that giving even more power to those already abusing it, whether deliberate of just by the design of crowd mentality, isn't going to ever benefit the chap on the street. 1. Smith, Jones etc, won't really want to pay for the privilidge of doing so, for each and every decision as their pension pot's have been taxed to death/reduced in value by good old Gordon Brown.
2. Pension funds are also not fully transparent. legally Mr Smith does not actually own the underlying shares, otherwise he would get tax relief based on the returns of each.
I see where your moral compass is taking you, but if that ability realy existed, it would be better used in parliament, to direct MP's to vote as their constituants wanted.
Edited by Hol on Tuesday 11th November 13:51
crankedup said:
With Government pushing on with pensions reforms the question of fund managers actions or inactions must come under closer scrutiny. Individuals paying into pension funds will surely want to know how their investment is doing?
That's what a benchmark does. But who is it that determines the benchmark that a fund is ranked against?
'Congratulations, sir, your investment has outperformed our benchmark'
'But I've lost money and paid a significant % of my portfolio away in costs!'
'No sir, you've outperformed. Well done. '
'Outperformed what?'
'The benchmark'
'How do you construct and measure this benchmark?'
'Ooh, it's very complicated but we use it to determine how big are bonuses are so it's really very good'
One other question to ask your pension fund is what their execution costs are for clearing on the LSE and how that relates to the costs billed to the client account.
walm said:
crankedup said:
Will it make a difference to how Boardrooms operate, possibly and with strong regard to Boardroom remuneration, which is really the crux of the matter in the discussion and always has been for me and other shareholders that I speak with.
D.A. represents a POV that suggests that the new regulations will not make any material difference to the status quo. My head tells me that may be the case but my heart tells me otherwise, unless changes are made dissatisfaction will continue to fester imo.
I just don't see the issue.D.A. represents a POV that suggests that the new regulations will not make any material difference to the status quo. My head tells me that may be the case but my heart tells me otherwise, unless changes are made dissatisfaction will continue to fester imo.
Part of my day job involves understanding executive comp for FTSE companies.
99% of retail investors don't have a clue how to understand even the simple stuff about how C-suite guys get paid.
They just get sucked into the politics of envy forced on them by the media when Sorrell earns >£10m after the share price doubles.
And frankly, whinging about someone getting well paid after DOUBLING your investment seems sour grapes to me.
Sure you want remuneration set up such that frauds such as Tesco are discouraged but if you get paid on the basis of an artificially inflated share price owing to fraudulent behaviour you can claw back the relevant bonus.
IME the vast vast majority of CEOs and CFOs etc... have huge proportions of their net worth tied to either direct ownership in the company through shares or options AND/OR highly relevant KPIs such as PBT or operating profit.
People get upset that these inevitably very rich guys stay rich even if the company heads to zero.
That is because they were very rich BEFORE they got involved in the company.
You can't force them to mortgage their house and buy shares.
You can't pay them zero salary.
In any case the disincentive to commit fraud should be the threat of prison more than financial ruin.
Other than a couple of examples, the only time shareholders complain about remuneration is after the shares fall which often isn't anything to do with the CEO or their remuneration.
I appreciate that some Boardrooms have a % remuneration tied in with Company shares, that's not the problem.
Sadly we do not have too many Sorrell types in the Boardrooms, the change in retail fortunes and changing nature of the high street are seeing exactly where weaknesses lie with big names going bust. Its been easy for a few decades to turn in good profits, now we see how good some of these Boards really are and they need to justify the remuneration packages like never before. Seems to be a reasonable state of affairs for most shareholders and not unreasonable. However, massaged numbers are not what most investors are looking for!
Nobody is suggesting that force should be used in anything other than sensible regulations that will bring further transparency into the businesses and give those small shareholders a legally binding 'say' into the business with special regard to remuneration packages. During the past few years Boardroom greed has been brought to public attention and this is partially the background reasoning to offering shareholders more 'say'. Use or not is not an issue.
In the final analysis it's about offering ALL Company shareholders those binding voting rights. Its up to each holder as to use or not. Lets keep bearing in mind, these people are employees, in many cases they have never formed their own Companies or risked their own money to do so. (Honourable exceptions of course)
DonkeyApple said:
crankedup said:
I did mention about the pension fund managers sitting back as they have done for decades and this is being addressed right now.
Fully agree, it is an extremely difficult job in introducing regulation in an attempt to clean up. Likely why its been allowed to go unhindered for so many decades.
Thanks for calling me an idiot! the point is either to have a go at regulating or let things continue as they were. Allowing to continue is not an option. The major problem is embroiled into an 'old boys club' which has to be broken.
Some C.E.O. have been pushed out by shareholders votes recently, for better or worse, at least this sends a signal.
The Boards must learn to play a straight bat with shareholders, like be honest and open.
We are all idiots as we all have pensions. Fully agree, it is an extremely difficult job in introducing regulation in an attempt to clean up. Likely why its been allowed to go unhindered for so many decades.
Thanks for calling me an idiot! the point is either to have a go at regulating or let things continue as they were. Allowing to continue is not an option. The major problem is embroiled into an 'old boys club' which has to be broken.
Some C.E.O. have been pushed out by shareholders votes recently, for better or worse, at least this sends a signal.
The Boards must learn to play a straight bat with shareholders, like be honest and open.
What do you think about banning proxy voting? That would prevent shareholders from sure ending their rights? But the reality is that it will never change as the majority of pension holders have no understanding as to what they are doing.
Not everyone has a pension, my guess is that many self employed salt away, if possible, into other investment vehicles. Its the PAYE, as we all know, that are being forced into pension schemes. It is these people that should be offered much more transparency and choice as to where and how their money is invested. I appreciate some choice is available at the outset but how many Companies offer some introduction into the murky world of investments, not many I wager. This is so wrong. Financial education should be high on the education curriculum imo.
Banning of Proxy Votes is a sure way of alienating a large chunk of shareholders and certainly would never be on anyone's agenda as a positive policy. It would serve no positive purpose.
DonkeyApple said:
crankedup said:
With Government pushing on with pensions reforms the question of fund managers actions or inactions must come under closer scrutiny. Individuals paying into pension funds will surely want to know how their investment is doing?
That's what a benchmark does. But who is it that determines the benchmark that a fund is ranked against?
'Congratulations, sir, your investment has outperformed our benchmark'
'But I've lost money and paid a significant % of my portfolio away in costs!'
'No sir, you've outperformed. Well done. '
'Outperformed what?'
'The benchmark'
'How do you construct and measure this benchmark?'
'Ooh, it's very complicated but we use it to determine how big are bonuses are so it's really very good'
One other question to ask your pension fund is what their execution costs are for clearing on the LSE and how that relates to the costs billed to the client account.
crankedup said:
Financial education should be high on the education curriculum imo.
I certainly agree but that's not all. There should be a compulsory GCSE covering personal finances through basic corporate and government. I have a US 401k and 3 UK Corporate Pensions. I can log on to the 401k now and tell you the NAV as of last night, I can chop and change between 2 dozen investments from cash, through european bond funds to latam equities, all with very clear charges and expenses, all benchmarked to major indecies. Or I could just move the entire 401k to a segregated account at my brokers and trade anything I want in it for zero cost. Conversely of my UK pensions 1 is reasonably accesable the other 2 are IMO deliberately opaque and unsurprisingly also poor performers. For years I never received anything from either, despite never changing my UK address, so I made a huge effort to track them down and gain electronic access. They could not be more difficult to manage, even just getting a value involves looking up how many 'units' I have, then logging in to another site to get the value of a unit etc... just horrible, forget comparing performance with an index. Changing investments is a nightmare and every year the websites change and make it difficult to access and honestly their tactics have worked; I haven't looked at them for a few years now. Just too much effort. The whole UK pensions industry needs a massive kick in the a55 and some consumer friendly standards applied. At the very least brokers should be allowed to offer SIPP wrappers/segregated accounts which you can move all your various fragmented pensions to and manage yourself. A fvcking monkey would beat most fund managers and he'd do it for bananas not a 5 million quid bonus and use of the corporate jet.This discussion/debate REALLY could do with its own thread. (its so off topic IMHO)
Benchmarks etc, are usually derived using funds of the same sort.
So a FTSE tracker fund, would be benchmarked against other tracker funds with similar investments and its performance would typically be based on ist performance against the competition.
Are you above average, in the top 10, top 25% etc.
I cannot think of an alternate method, unless you want to compare apples with pears.
Benchmarks etc, are usually derived using funds of the same sort.
So a FTSE tracker fund, would be benchmarked against other tracker funds with similar investments and its performance would typically be based on ist performance against the competition.
Are you above average, in the top 10, top 25% etc.
I cannot think of an alternate method, unless you want to compare apples with pears.
Hol said:
This discussion/debate REALLY could do with its own thread. (its so off topic IMHO)
Benchmarks etc, are usually derived using funds of the same sort.
So a FTSE tracker fund, would be benchmarked against other tracker funds with similar investments and its performance would typically be based on ist performance against the competition.
Are you above average, in the top 10, top 25% etc.
I cannot think of an alternate method, unless you want to compare apples with pears.
Many moons ago I ran the risk/performance side of one of the prime custodians. Obviously benchmarking was a primary role. Benchmarks etc, are usually derived using funds of the same sort.
So a FTSE tracker fund, would be benchmarked against other tracker funds with similar investments and its performance would typically be based on ist performance against the competition.
Are you above average, in the top 10, top 25% etc.
I cannot think of an alternate method, unless you want to compare apples with pears.
I have never met a fund manager who didn't try and dupe the construction of the index. And I also ran in with enough staff who would be compliant as their true desire was to move client side.
I also have a lot of alumni who are managers. Any with any form of true ability do not remain in that sector past their 20s. Those that do remain often only have to stay out of the bottom quartile to capture rewards. That alone is an insane practice. Mediocrity must never be rewarded.
But when you have the likes of Horlick and Manek being made into stars then you know there is an insidious rot that highlights an industry that has become inbred, media reliant and exists to feed off the ignorant.
I wouldn't let anyone on the inside set any benchmarks. I'd move it to the client side and use it as a tool to directly engage client with manager.
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