Philip Green, does anyone care what the truth is?
Discussion
Jockman said:
Trophy Husband said:
I trust my accountant. This is his advice. We care about our business and its continuing success.
Good advice, so long as it was structured correctly and was mindful of breaching different tax brackets.FredClogs said:
What reasons?
Keeps the money in the Company for use on other projects.Allows a Director to charge interest (taxable).
Enables a Director to take advantage of the tax regime at that time - very apt with recent changes.
Allows a Company to defer payment if cashflow is tight.
These are off the top of my head. Your Accountant will know more reasons.
Trophy Husband said:
It strikes me that PG has drawn his dividend regardless of the impact on the business. That is pure greed.
No.He took the dividends ages ago when there was a pension surplus and the business was puking boat-loads of cash and highly profitable.
Since then the high street has turned dramatically south, yields have collapsed (raising the value of the pension liabilities), and PG disposed of the once highly valuable business for £1.
There is absolutely nothing wrong with failing to predict the demise of the high street.
There is also absolutely nothing wrong with taking profits when a business is going well and has no need of extra investment.
Do you think shareholders in Tescos in 2010 should be helping to plug their current pension deficit?
Of course, not.
That is the current owners responsibility.
What if BHS hadn't EVER made a profit but PG had plenty of cash from say Arcadia - should he be forced to bail out the pensioners with THAT cash? Seems odd.
However, what is wrong with what he did is 100% the SALE OF BHS TO A MORON.
PG must have known that BHS was an absolute basket case.
He also clearly knew that Dominic Chappell was completely unqualified. Goldman told him even if it wasn't obvious from a skim-read of his appalling CV.
And rather than saying "sorry you bought a lemon, caveat emptor" there is a HUGE moral responsibility to that lemon as it contains thousands of pensioners who need to eat.
That's the problem.
The whole dividend thing is a complete side-issue for the politics of envy. Although it does offer hope that he does actually have the cash to make good on his promise to help those pensioners.
Trophy Husband said:
I run an SME and had the opportunity of a healthy dividend being posted based upon our profits last financial year. Both my partner and I agreed that whilst it was available to us we would only draw the dividend to return to the business as Directors Loans. The reason for doing this? Safeguarding the future of our staff. If, at the end of this FY we remain in a healthy position then we may look at drawing more. If not, it remains. It strikes me that PG has drawn his dividend regardless of the impact on the business. That is pure greed.
About ten years ago I was involved in a company making significant profits with a very healthy balance sheet, like you we chose not to take large dividends or bonuses. 8 months later the company went into administration due to a very bad debt and the bank deciding to pull out of the UK SME marketTaking a dividend would have made no difference to the company or staff, obviously I now regret not taking it, be careful a lot can change very quickly.
walm said:
He took the dividends ages ago when there was a pension surplus and the business was puking boat-loads of cash and highly profitable.
Since then the high street has turned dramatically south, yields have collapsed (raising the value of the pension liabilities), and PG disposed of the once highly valuable business for £1.
There is absolutely nothing wrong with failing to predict the demise of the high street.
That is a convenient but inaccurate generalisation. Philip Green's profitable businesses still very much rely on 'high street' presence. He cash-stripped a business and let it go to the wall while preserving other brands. Not illegal, but not a twist-of-fate either.Since then the high street has turned dramatically south, yields have collapsed (raising the value of the pension liabilities), and PG disposed of the once highly valuable business for £1.
There is absolutely nothing wrong with failing to predict the demise of the high street.
Adrian W said:
About ten years ago I was involved in a company making significant profits with a very healthy balance sheet, like you we chose not to take large dividends or bonuses. 8 months later the company went into administration due to a very bad debt and the bank deciding to pull out of the UK SME market.
Wasn't RBS, was it? 
walm said:
Trophy Husband said:
It strikes me that PG has drawn his dividend regardless of the impact on the business. That is pure greed.
No.He took the dividends ages ago when there was a pension surplus and the business was puking boat-loads of cash and highly profitable.
Since then the high street has turned dramatically south, yields have collapsed (raising the value of the pension liabilities), and PG disposed of the once highly valuable business for £1.
There is absolutely nothing wrong with failing to predict the demise of the high street.
There is also absolutely nothing wrong with taking profits when a business is going well and has no need of extra investment.
Do you think shareholders in Tescos in 2010 should be helping to plug their current pension deficit?
Of course, not.
That is the current owners responsibility.
What if BHS hadn't EVER made a profit but PG had plenty of cash from say Arcadia - should he be forced to bail out the pensioners with THAT cash? Seems odd.
However, what is wrong with what he did is 100% the SALE OF BHS TO A MORON.
PG must have known that BHS was an absolute basket case.
He also clearly knew that Dominic Chappell was completely unqualified. Goldman told him even if it wasn't obvious from a skim-read of his appalling CV.
And rather than saying "sorry you bought a lemon, caveat emptor" there is a HUGE moral responsibility to that lemon as it contains thousands of pensioners who need to eat.
That's the problem.
The whole dividend thing is a complete side-issue for the politics of envy. Although it does offer hope that he does actually have the cash to make good on his promise to help those pensioners.
r11co said:
walm said:
He took the dividends ages ago when there was a pension surplus and the business was puking boat-loads of cash and highly profitable.
Since then the high street has turned dramatically south, yields have collapsed (raising the value of the pension liabilities), and PG disposed of the once highly valuable business for £1.
There is absolutely nothing wrong with failing to predict the demise of the high street.
That is a convenient but inaccurate generalisation. Philip Green's profitable businesses still very much rely on 'high street' presence. He cash-stripped a business and let it go to the wall while preserving other brands. Not illegal, but not a twist-of-fate either.Since then the high street has turned dramatically south, yields have collapsed (raising the value of the pension liabilities), and PG disposed of the once highly valuable business for £1.
There is absolutely nothing wrong with failing to predict the demise of the high street.
Frankly I hope this gets sorted such that he is on the hook for their pensioners too.
But what I wrote still stands.
BHS was beyond hope, beyond repair and a basket case.
It is my job to invest in retail companies and it would have been a very close second to my bets against HMV, Comet and Game Group.
I thought there was something unedifying about our elected members of parliament, who are no strangers to spivery, hiding behind parliamentary privilege to roast a bloke who has not yet broken any criminal laws.
Personally I think Green IS the unacceptable face of capitalism at least for the cynical way everything ends up in his wife's Monaco bank account. But there's a slippery slope here when the establishment turns into a wolf pack simply to appease the hard-of-thinking.
I was pleased when Jacob R-M, a chap whose formidable IQ dwarfs my own feeble attempts at forming cohesive thoughts, agrees.
Personally I think Green IS the unacceptable face of capitalism at least for the cynical way everything ends up in his wife's Monaco bank account. But there's a slippery slope here when the establishment turns into a wolf pack simply to appease the hard-of-thinking.
I was pleased when Jacob R-M, a chap whose formidable IQ dwarfs my own feeble attempts at forming cohesive thoughts, agrees.
Trophy Husband said:
I appreciate your point. However, how did a pension surplus of £5m in 2000 when toady bought the business turn into such a huge deficit as at last year? Was it to do with diminishing contributions and the stock market crash? A perfect storm if you like. I just don't get it but then I am a civil engineer. How much was the pension pot 'worth' when it was £5m in surplus and how much was it worth last year? I just can't foresee such huge losses accruing over such a period unless pension investments were so poor/high risk. Anyway, he's a tw4t. If I had to give 1/12th of my worth to safeguard thousands of peoples expected retirement funds, I'd do it. So he'd be left with £5.5 billion. Who the fluck can spend that? It would be ironic if he relented to retain his Sirness. Now that would be cash for honours!
In a nutshell, the deficit is nothing to do with the stock market and everything to do with interest rates.Trophy Husband said:
I appreciate your point. However, how did a pension surplus of £5m in 2000 when toady bought the business turn into such a huge deficit as at last year? Was it to do with diminishing contributions and the stock market crash? A perfect storm if you like. I just don't get it but then I am a civil engineer. How much was the pension pot 'worth' when it was £5m in surplus and how much was it worth last year? I just can't foresee such huge losses accruing over such a period unless pension investments were so poor/high risk. Anyway, he's a tw4t. If I had to give 1/12th of my worth to safeguard thousands of peoples expected retirement funds, I'd do it. So he'd be left with £5.5 billion. Who the fluck can spend that? It would be ironic if he relented to retain his Sirness. Now that would be cash for honours!
To give you a sense - Tesco's deficit was up £3.2bn in the last 6 months. The numbers are huge and can move around very swiftly.It is almost nothing to do with the investments - they probably did fine.
It is all to do with the expected INCOME from those investments.
We are now in ZIRP - that makes risk-free investments (that pension funds have to use to generate income) generate very VERY little income (the "Z" stands for ZERO!).
Let's keep it simple.
You know you need £20k a year to live on in retirement.
So you save a lovely pension pot of £500k.
With annuity rates of 4% you can generate that £20k no probs.
However, now annuity rates (NOT PG's FAULT) fall to 2%.
Suddenly your £500k is only generating £10k so you have a pension deficit of £500k!!!! From ZERO (assets match liabilities) suddenly you are out of pocket by £500k!!!
Trophy Husband said:
I appreciate your point. However, how did a pension surplus of £5m in 2000 when toady bought the business turn into such a huge deficit as at last year? Was it to do with diminishing contributions and the stock market crash?
A lot of it is the fact that people are living longer; longevity has increased around 4 years between 2000 and 2016. Don't pick me apart on the figures, by the way, it's just illustrating the point, which is that 4 years may not sound like a lot, but it's a large percentage of a retirement. As a result, all the people in the final salary scheme who would have been expected to die at (say) 75 (drawing a pension for 10 years), would live until 79, an increase of 40%. Massive oversimplification above, and there are loads of other factors to consider, but although increased longevity is a great thing, there's that tiny wee problem of paying for those additional years.
I strikes me that notwithstanding the "morality" issues that are driving public/populist opinion,the main problem for PG is his personification of a pantomime villain which has made him an easy media target.
The pictures of him relaxing and sunning his ample torso on his new £100 million new toy and engaging in petulant exchanges with tabloid reporters were a gift from heaven to his opponents.
If nothing else one should learn that in one's financial/business dealings it is prudent to keep a discreet profile.
The root of the BHS debacle is that he dropped the plate and we all know that in business you need to keep all the plates spinning.
The pictures of him relaxing and sunning his ample torso on his new £100 million new toy and engaging in petulant exchanges with tabloid reporters were a gift from heaven to his opponents.
If nothing else one should learn that in one's financial/business dealings it is prudent to keep a discreet profile.
The root of the BHS debacle is that he dropped the plate and we all know that in business you need to keep all the plates spinning.
avinalarf said:
I strikes me that notwithstanding the "morality" issues that are driving public/populist opinion,the main problem for PG is his personification of a pantomime villain which has made him an easy media target.
The pictures of him relaxing and sunning his ample torso on his new £100 million new toy and engaging in petulant exchanges with tabloid reporters were a gift from heaven to his opponents.
If nothing else one should learn that in one's financial/business dealings it is prudent to keep a discreet profile.
The root of the BHS debacle is that he dropped the plate and we all know that in business you need to keep all the plates spinning.
100% agree with this.The pictures of him relaxing and sunning his ample torso on his new £100 million new toy and engaging in petulant exchanges with tabloid reporters were a gift from heaven to his opponents.
If nothing else one should learn that in one's financial/business dealings it is prudent to keep a discreet profile.
The root of the BHS debacle is that he dropped the plate and we all know that in business you need to keep all the plates spinning.
And you didn't even mention Monaco tax dodges!
walm said:
It is my job to invest in retail companies and it would have been a very close second to my bets against HMV, Comet and Game Group.
Clothing and household goods are very different markets to brown/white goods and entertainment content though. People don't need to 'try on' fridges, and it didn't take an idiot to work out that stocking and flogging silver discs was never going to last in the face of on-line content.The problem for BHS wasn't 'high street demise', it was failing to compete with Primark (which now has a flagship store in Oxford Street).
Edited by r11co on Friday 21st October 11:28
walm said:
Trophy Husband said:
I appreciate your point. However, how did a pension surplus of £5m in 2000 when toady bought the business turn into such a huge deficit as at last year? Was it to do with diminishing contributions and the stock market crash? A perfect storm if you like. I just don't get it but then I am a civil engineer. How much was the pension pot 'worth' when it was £5m in surplus and how much was it worth last year? I just can't foresee such huge losses accruing over such a period unless pension investments were so poor/high risk. Anyway, he's a tw4t. If I had to give 1/12th of my worth to safeguard thousands of peoples expected retirement funds, I'd do it. So he'd be left with £5.5 billion. Who the fluck can spend that? It would be ironic if he relented to retain his Sirness. Now that would be cash for honours!
To give you a sense - Tesco's deficit was up £3.2bn in the last 6 months. The numbers are huge and can move around very swiftly.It is almost nothing to do with the investments - they probably did fine.
It is all to do with the expected INCOME from those investments.
We are now in ZIRP - that makes risk-free investments (that pension funds have to use to generate income) generate very VERY little income (the "Z" stands for ZERO!).
Let's keep it simple.
You know you need £20k a year to live on in retirement.
So you save a lovely pension pot of £500k.
With annuity rates of 4% you can generate that £20k no probs.
However, now annuity rates (NOT PG's FAULT) fall to 2%.
Suddenly your £500k is only generating £10k so you have a pension deficit of £500k!!!! From ZERO (assets match liabilities) suddenly you are out of pocket by £500k!!!
Gassing Station | News, Politics & Economics | Top of Page | What's New | My Stuff