Sir Philip Green vs Select committee

[5pen]

Murcielago_Boy said:

sidicks said:

I imagine that would be pretty simple:

- Maxwell stole from the pension fund.

- Green took dividends from the business and subsequently the pension scheme became underfunded (but not necessarily as a direct cause of the dividends).

Edited by sidicks on Tuesday 26th July 10:08

This is why Frank Field has gone overboard...

...just like big Bob, who, according to Frank Field was just 'borrowing' the pension fund money.

Frank said... "I've always thought Maxwell meant to pay the money back, he was just going all over the place borrowing money to keep his companies going. When the music stopped he had no money."

[RYH64E]

crankedup said:

Stand on your soapbox and preach that chapter and verse to the BHS employees who have just lost their job from a store that has been on the High Street for 88 years. Still green keeps the boat makers happy. Agree nothing illegal has thus far been uncovered, but it is the morality and ethics which are under debate and seem to be somewhat lacking in this case.
As for green shutting shop on his other businesses, plenty of good people would be willing to take them on and may give a boost of confidence to those employed in these other businesses.

The harsh reality is that business owners largely run their businesses for the benefit of their shareholders, employees are but a necessary evil. My business is run for my benefit, I'd like to think that I treat my employees well and pay them fairly, but the reason I turn up to work everyday is to make enough money to keep myself and my family in the style to which we're accustomed, not for the benefit of my empoyees. I don't mind making a reasonable contribution to my employees pension funds (and am now obliged to do so), but what's needed to keep some of these large pension funds fully funded is completely unreasonable imo, so I'm not surprised when owners act as Green has acted.

[mcdjl]

RYH64E said:

The harsh reality is that business owners largely run their businesses for the benefit of their shareholders, employees are but a necessary evil. My business is run for my benefit, I'd like to think that I treat my employees well and pay them fairly, but the reason I turn up to work everyday is to make enough money to keep myself and my family in the style to which we're accustomed, not for the benefit of my empoyees. I don't mind making a reasonable contribution to my employees pension funds (and am now obliged to do so), but what's needed to keep some of these large pension funds fully funded is completely unreasonable imo, so I'm not surprised when owners act as Green has acted.

Do you have a high staff turn over? If my boss viewed me as an evil (necessary or otherwise) he'd need to pay me more than fairly or really enjoying my job to keep me.

[J4CKO]

I must say I haven't heard much good about him, apart form he looks after those directly around him, but that sounds more like keeping people sweet so they keep his back passage clean.

Does he do anything philanthropic, proper amounts, not dropping 25 grand on a signed football or something tax deductible ?

Are we misjudging him or is he an odious, grasping, greedy man without a shred of empathy, compassion or any other redeeming feature ?

[Halb]

crankedup said:

At long last perhaps these greedy self serving parasites may just be recognised for the damage that their actions cause to Society, employees and good business folk . Same goes for the greedy bankers. Talk of a board seat for worker representation is long long overdue, the sooner it is introduced the better.

It won't happen for a while. There are too many who wish to be like those types.

[iphonedyou]

mcdjl said:

Do you have a high staff turn over? If my boss viewed me as an evil (necessary or otherwise) he'd need to pay me more than fairly or really enjoying my job to keep me.

RYH64E's point was fairly made and I can't see how anybody could view him negatively based on it.

With that said, not everybody - indeed, possibly the majority, worldwide, perhaps even in the UK - aren't in a position to make a call on their employment based purely on whether the boss views them as a necessary evil or not.

Indeed, there's probably some inverse correlation between the degree of tttiness of a boss and the ability of employees to move elsewhere (due skill set, financial need, etc.)

[iphonedyou]

J4CKO said:

I must say I haven't heard much good about him, apart form he looks after those directly around him, but that sounds more like keeping people sweet so they keep his back passage clean.

Does he do anything philanthropic, proper amounts, not dropping 25 grand on a signed football or something tax deductible ?

Are we misjudging him or is he an odious, grasping, greedy man without a shred of empathy, compassion or any other redeeming feature ?

http://www.wealthx.com/articles/2015/philip-nigel-...

Lifetime giving is apparently in excess of $22m.

[tescorank]

I believe the greed written one drops that on a weekend in Vegas when he jets in.

[Halb]

iphonedyou said:

Indeed, there's probably some inverse correlation between the degree of tttiness of a boss and the ability of employees to move elsewhere (due skill set, financial need, etc.)

I guess so.
There is a correlation between how well employees are treated/workplace enviroment and production output.

[J4CKO]

iphonedyou said:

J4CKO said:

I must say I haven't heard much good about him, apart form he looks after those directly around him, but that sounds more like keeping people sweet so they keep his back passage clean.

Does he do anything philanthropic, proper amounts, not dropping 25 grand on a signed football or something tax deductible ?

Are we misjudging him or is he an odious, grasping, greedy man without a shred of empathy, compassion or any other redeeming feature ?

http://www.wealthx.com/articles/2015/philip-nigel-...

Lifetime giving is apparently in excess of $22m.

So, a lot of money in isolation, but absolutely cock all when you are worth 5 billion dollars.

Would be nice if he actually did something useful other than buying Yachts, planes and houses, surely you get to a point when you have as much "stuff" as you ever need, perhaps put a bit back and stop taking all the time when you have enough a thousand times over, he is sixty four, he may live another twenty years, surely he could do some good, as it is now, most of the world thinks he is a bit of a .

[Welshbeef]

hornetrider said:

sidicks said:

hornetrider said:

Oh, that's fine then. You can suck all the money out of a vast business so it has no cash reserves to survive any downturn in trade, putting thousands out of jobs and their pensions at risk.

No worries.

Sounds like you don't understand how businesses or DB pension schemes work, in which case probably best NOT to comment on a thread about business and pensions schemes...!

Classy response. I don't, obviously.

Quick question for my simple mind. How would BHS be doing today if 430 million in divis hadn't been extracted?

Right a few points
1. A company makes profit
2. That profit is after tax and after all pension contributions
3. It can all be taken at once or whenever.
4. It is called retained profit.
5. The pension fund doesn't own retained profits the share holders do.
6. The company doesn't own the retrained profits the share holders do.

So in this situation where a company pension fund defined benefit is under funded they have to make payments into the fund from future profits.

To take the retained profits and put it into the pension fund it would be a reinvestment by shareholders. Given there are actuaries giving fund valuations every 3 years and then you make the adjustment to higher investment or sustain current rate is determined.
I would suspect the biggest part of the issue was created pre Green buying the company as during his era we had the massive stock market crash interest rates to 0.5% govt guilts giving near 0% returns.

So a question to all - given a new owner takes it over why would or why should they be liable for the utter collapse of the stock market for the cumulative position? Why should they be liable for decades of under investment by previous owners who refused to accept longer living and therefore higher investments into the fund why should he be liable for the pension holiday investment they took?


What is a farce is as the market has changed dramatically from when it went into administration to today should he if he has to pay it all pay in what was due on liquidation date or at some future point which has amplified the issue? What about all UK pension schemes which went from £268billion deficit to 340billion deficit pre and post Brexit? Should all us workers now pay in more instantly ? Should a new owner now cough up for that or all the previous owners ? Where does he Buck stop?

[crankedup]

Reluctantly looking back at another great old High St name, Selfridges, it is not very different at all at what happened to that business with the help of its CEO and founder. Nothing has changed for 100 years.

[sidicks]

Welshbeef said:

I would suspect the biggest part of the issue was created pre Green buying the company as during his era we had the massive stock market crash interest rates to 0.5% govt guilts giving near 0% returns.

So a question to all - given a new owner takes it over why would or why should they be liable for the utter collapse of the stock market for the cumulative position? Why should they be liable for decades of under investment by previous owners who refused to accept longer living and therefore higher investments into the fund why should he be liable for the pension holiday investment they took?

Firstly, when buying a business, the price should reflect the future profits expected to arise, with due regard for the potential liability in respect of the pension fund - any shortfall should have been known at the point of purchase and hence factored into the purchase price.

Secondly, the valuation of the scheme would be dependent on the assumptions used and in particular the extent to which the intention was to closely match liabilities (I.e. Take minimal risk) or to deliberately mismatch with a view of generating excess returns to cheapen the cost of the scheme. Clearly the deficit under the first approach would be larger than under the second.

It therefore seems appropriate that the new owner of the business is fully responsible for the pension scheme and any adverse impact of the markets on the deficit. Had the fund closely matched when it was in a surplus position, then it would have been relatively immune to changes in future interest rates, inflation and equity market levels.

Welshbeef said:

What is a farce is as the market has changed dramatically from when it went into administration to today should he if he has to pay it all pay in what was due on liquidation date or at some future point which has amplified the issue? What about all UK pension schemes which went from £268billion deficit to 340billion deficit pre and post Brexit? Should all us workers now pay in more instantly ? Should a new owner now cough up for that or all the previous owners ? Where does he Buck stop?

That is why trustees work with sponsors to resolve deficits over a sensible period (normally 5 or 10 years), as most sponsors do not simply have the cash to close a shortfall immediately.

Edited by sidicks on Tuesday 26th July 13:46

[crankedup]

sidicks said:

crankedup said:

In this example it seems to me that the rules need changing, after all the Company has been run into the ground whilst the extraction of millions was going on for years.

How was the business performing when the dividends were taken?

Edited by sidicks on Tuesday 26th July 11:48

In decline since 2011. It has all the hallmarks of an asset stripper. Of course he isn't that but the outcome is remarkably similar.

[crankedup]

mcdjl said:

RYH64E said:

The harsh reality is that business owners largely run their businesses for the benefit of their shareholders, employees are but a necessary evil. My business is run for my benefit, I'd like to think that I treat my employees well and pay them fairly, but the reason I turn up to work everyday is to make enough money to keep myself and my family in the style to which we're accustomed, not for the benefit of my empoyees. I don't mind making a reasonable contribution to my employees pension funds (and am now obliged to do so), but what's needed to keep some of these large pension funds fully funded is completely unreasonable imo, so I'm not surprised when owners act as Green has acted.

Do you have a high staff turn over? If my boss viewed me as an evil (necessary or otherwise) he'd need to pay me more than fairly or really enjoying my job to keep me.

You gave exactly the reply I would use. It demonstrates the underlying 'meme' attitude that is manifest in this Capitalistic Society. Good staff should be viewed as part of a team and all team members share in the respect and reward. Of course Company owners are perfectly entitled to take an opposite POV and that is where we are it seems.

[crankedup]

Halb said:

crankedup said:

At long last perhaps these greedy self serving parasites may just be recognised for the damage that their actions cause to Society, employees and good business folk . Same goes for the greedy bankers. Talk of a board seat for worker representation is long long overdue, the sooner it is introduced the better.

It won't happen for a while. There are too many who wish to be like those types.

Vast difference in greed and ambition though. For a worker to sit on a Board it will require that person to have a reasonable intellect and driving motivation for business I would hope. Should that person go onto better employment his Board seat will be taken up by another similar worker with aspiration. Nothing wrong in that I assume. The point is a worker on a Company Board van act as a brake on those escalating Board salaries perhaps.

[turbobloke]

crankedup said:

mcdjl said:

RYH64E said:

The harsh reality is that business owners largely run their businesses for the benefit of their shareholders, employees are but a necessary evil. My business is run for my benefit, I'd like to think that I treat my employees well and pay them fairly, but the reason I turn up to work everyday is to make enough money to keep myself and my family in the style to which we're accustomed, not for the benefit of my empoyees. I don't mind making a reasonable contribution to my employees pension funds (and am now obliged to do so), but what's needed to keep some of these large pension funds fully funded is completely unreasonable imo, so I'm not surprised when owners act as Green has acted.

Do you have a high staff turn over? If my boss viewed me as an evil (necessary or otherwise) he'd need to pay me more than fairly or really enjoying my job to keep me.

You gave exactly the reply I would use. It demonstrates the underlying 'meme' attitude that is manifest in this Capitalistic Society. Good staff should be viewed as part of a team and all team members share in the respect and reward. Of course Company owners are perfectly entitled to take an opposite POV and that is where we are it seems.

Not generally speaking as 'we' aren't 'there' reading about this on a regular basis, though there will always be exceptions. This type of extreme example surfaces once in a while.

[sidicks]

crankedup said:

Vast difference in greed and ambition though. For a worker to sit on a Board it will require that person to have a reasonable intellect and driving motivation for business I would hope. Should that person go onto better employment his Board seat will be taken up by another similar worker with aspiration. Nothing wrong in that I assume. The point is a worker on a Company Board van act as a brake on those escalating Board salaries perhaps.

What have Board salaries got to do with shareholder dividends?

Edited by sidicks on Tuesday 26th July 14:19

[The Surveyor]

crankedup said:

mcdjl said:

RYH64E said:

The harsh reality is that business owners largely run their businesses for the benefit of their shareholders, employees are but a necessary evil. My business is run for my benefit, I'd like to think that I treat my employees well and pay them fairly, but the reason I turn up to work everyday is to make enough money to keep myself and my family in the style to which we're accustomed, not for the benefit of my empoyees. I don't mind making a reasonable contribution to my employees pension funds (and am now obliged to do so), but what's needed to keep some of these large pension funds fully funded is completely unreasonable imo, so I'm not surprised when owners act as Green has acted.

Do you have a high staff turn over? If my boss viewed me as an evil (necessary or otherwise) he'd need to pay me more than fairly or really enjoying my job to keep me.

You gave exactly the reply I would use. It demonstrates the underlying 'meme' attitude that is manifest in this Capitalistic Society. Good staff should be viewed as part of a team and all team members share in the respect and reward. Of course Company owners are perfectly entitled to take an opposite POV and that is where we are it seems.

I would be less inclined to view this as evidence of a 'Capitalist Society' by stating that this is an approach by retailers in general, the market-trader mentality.

When the success of a high-street business comes down to tiny margins the sales floor margins become much more important than the staff to those at the top of the ladder. There is something about the rag-trade which draws in people of a mercenary persuasion I think, from Victorian mill owners to far-east sweat shop managers, to the likes of Philip Green and Mike Ashley.

[Welshbeef]

sidicks said:

Welshbeef said:

I would suspect the biggest part of the issue was created pre Green buying the company as during his era we had the massive stock market crash interest rates to 0.5% govt guilts giving near 0% returns.

So a question to all - given a new owner takes it over why would or why should they be liable for the utter collapse of the stock market for the cumulative position? Why should they be liable for decades of under investment by previous owners who refused to accept longer living and therefore higher investments into the fund why should he be liable for the pension holiday investment they took?

Firstly, when buying a business, the price should reflect the future profits expected to arise, with due regard for the potential liability in respect of the pension fund - any shortfall should have been known at the point of purchase and hence factored into the purchase price.

Secondly, the valuation of the scheme would be dependent on the assumptions used and in particular the extent to which the intention was to closely match liabilities (I.e. Take minimal risk) or to deliberately mismatch with a view of generating excess returns to cheapen the cost of the scheme. Clearly the deficit under the first approach would be larger than under the second.

It therefore seems appropriate that the new owner of the business is fully responsible for the pension scheme and any adverse impact of the markets on the deficit. Had the fund closely matched when it was in a surplus position, then it would have been relatively immune to changes in future interest rates, inflation and equity market levels.

Welshbeef said:

What is a farce is as the market has changed dramatically from when it went into administration to today should he if he has to pay it all pay in what was due on liquidation date or at some future point which has amplified the issue? What about all UK pension schemes which went from £268billion deficit to 340billion deficit pre and post Brexit? Should all us workers now pay in more instantly ? Should a new owner now cough up for that or all the previous owners ? Where does he Buck stop?

That is why trustees work with sponsors to resolve deficits over a sensible period (normally 5 or 10 years), as most sponsors do not simply have the cash to close a shortfall immediately.

Edited by sidicks on Tuesday 26th July 13:46

But no one could foresee the financial crash and 0.5% interest rates could hey