At last Shareholders speak-Barclays Bank
Discussion
RYH64E said:
heppers75 said:
Can you not do simple math or are you avoiding the premise because it makes sense?
Also I can understand if a business does not make any profit that they get no bonus but hello CHF5.3bn!!!
ETA - You lot have been banging on about if profits and share values fall that pain should be shared, you have just provided a direct example of the fact that is happening and now you are arguing it should be even more draconian in that they even if the business makes billions in profit the execs should still get f**k all! Where does your logic (such as it is!) actually end?
The execs get paid to produce a profit, I'm not proposing reducing their salary. Also I can understand if a business does not make any profit that they get no bonus but hello CHF5.3bn!!!
ETA - You lot have been banging on about if profits and share values fall that pain should be shared, you have just provided a direct example of the fact that is happening and now you are arguing it should be even more draconian in that they even if the business makes billions in profit the execs should still get f**k all! Where does your logic (such as it is!) actually end?
Edited by heppers75 on Wednesday 2nd May 09:28
A bonus should be a reward for exceptional performance, which I would measure in terms of value to the shareholders. Shareholders losing a big chunk of their investment (which usually far outweighs any benefit from dividends) doesn't warrant a bonus imo.
You focus on the absolute size of the profit rather than any other measure such as RoE. Big companies should produce big profits, they have a lot of capital and a lot of people. It isn't the size of the profit that is important rather the size of the profit in relation to the size of the company.
Anyway, I haven't got time for this today. I'm at work, I've got a desk load of stuff to sort out and I'm going out for lunch. I'll pick it up again this evening.
I have attached the UBS figures and yes they are very much down on the previous year but the business is generating a decent RoE, Profit and all the key numbers look not exceptional but actually considering the state of the sctor and the markets in general pretty healthy. Especially still when you consider there is a huge loss there they had to take on the chin. However in recognition of the worse performance the bonuses across the business were significantly reduced by 60%. Is that not what you want to happen, I thought it was so is it that in this case you think it has not gone far enough then? As I have to say it all looks based on these facts pretty ok to me as the percentage differential seems to work out looking at those numbers, if not please say where not?
Edited by heppers75 on Wednesday 2nd May 15:16
TTwiggy said:
I note that 'not exactly a raving communist' Ferdinand Mount (Eton and Oxford educated, former head of policy for Margaret Thatcher) seems to agree that the gulf between rich and poor has become unsustainably wide, and that shareholders are getting a bad deal in his new book 'The New Few'.
Erm, sorry chap your wasting your time, just like me, putting over news like that. Those in favour of the status quo will not be bamboozeled into the truth with facts such as that. Like rabbits in headlights they be.will_ said:
crankedup said:
will_ said:
plasticpig said:
will_ said:
Personally I think share-holder activism is a good thing, but the minority of share-holders can't (and don't) have any right to hold sway over the majority....
They do actually; in certain limited circumstances. See Section 994 of the Companies Act 2006.The vast, vast majortiy of company activities require 50% or even 75% shareholder approval. I don't see why director remuneration should be any different. No-one is obliged to buy and hold shares in companies which are either not performing, or are over-paying their executives.
The fact is, the majority of shareholders are content. I'm sorry that you don't like that, but it would be wholly wrong for the minority to act against the evident wishes of the majority.
will_ said:
crankedup said:
will_ said:
crankedup said:
will_ said:
Isn't the point (really) that if 30% of the shareholders aren't happy, 70% are? And the majority rules? Or should the 30% over-rule the 70%?
The thing about shares is that if you aren't happy with the performance or the pay scales, you sell the shares and - if enough people do that - the share price falls and (eventually) the directors get the chop (not to mention the value of their own portfolios falling). If that isn't happening then (overall) it's clear that the share-holders are happy with the performance and the pay - right?
Personally I think share-holder activism is a good thing, but the minority of share-holders can't (and don't) have any right to hold sway over the majority....
As I have said time and time again, why should shareholders have to ditch stock because the managers are taking excessive remunerations? The fact is that shareholders must be given BINDING VOTING RIGHTS in a way spoken of by Vince Cable. Management must not be permitted to set their own targets and rewards through boards that self serve each other. The idea that senior management can only be judged upon the share price is wholly wrong and certainly unfair to that management. I may find excessive remuneration abhorrent but I still want to see good reward for good results. At the same time you can't judge performance on share price alone unless you are using that as a very long term judgement, in which case poor management would exist in the mix for years. Presume that performance indicators are used by line managers but the senior level of Directors is another issue. The thing about shares is that if you aren't happy with the performance or the pay scales, you sell the shares and - if enough people do that - the share price falls and (eventually) the directors get the chop (not to mention the value of their own portfolios falling). If that isn't happening then (overall) it's clear that the share-holders are happy with the performance and the pay - right?
Personally I think share-holder activism is a good thing, but the minority of share-holders can't (and don't) have any right to hold sway over the majority....
The majority of shareholders (i.e. owners) ARE happy. So what, exactly, is the problem - except that you (a non-shareholder) aren't happy? And if you are a shareholder, but are not impressed by the performance and/or remuneration packages, why should you be able to over-rule the majority? You can't, therefore your only option is to sell or put up with it - because the majority of the owners ARE happy.
Shareholders already have the power to make a stand against directors' remuneration. The fact is, they don't, either because they don't care, or because they are content with the performance of the company and/or the remuneration.
If only 30% of shareholders object to a remuneration package, that is insufficient to change it. It is completely irrelevant if those shareholders are institutional or not, because the basic investor has a complete choice to invest their funds elsewhere should they not agree with how their fund manager is acting or using their voting rights. No-one is compelled to own shares in companies in which they object to director pay, whether directly or indirectly through pension funds.
Agree that 30% vote from shareholders is insufficient to bring change or instruct changes, I have never suggested otherwise. It is not an irrelevance as to how an individual will have shares held, in fact it is the opposite IMV. Those with less time often invest in managed funds, certainly pension savers will. Your argument that individuals should not invest in particular companies only holds true in certain circumstances. However, when the companies remuneration packages are in question the shareholders should have, and soon will have, binding votes that will either agree or disagree with the proposals. It is not the case of saying 'he/she is paid to much so I won't invest' that would be plainly daft and not a basis of an investment strategy. This for me is the sole basis of the discussion, its not a matter of too much pay (although I think it is) but of shareholders having a binding vote on the matter. If it is to be in favour of a huge remuneration package and its voted through, then fine I wouldn't argue against it passed that stage, then I would consider if my investment is best placed within the company.
heppers75 said:
.....working in senior management & board level roles in FTSE companies with folks in bonus driven roles that bonuses should be awarded for performance metrics as agreed and that will be a sliding scale with a greater bonus for greater performance.
Your term bonus-driven reminded me of a senior banker interviewed on Newsnight some time back when bankers were headline news. His view was that he didn't need a bonus to do his job properly and the concept that he would do so without one he found slightly insulting.Edited by heppers75 on Wednesday 2nd May 15:16
crankedup said:
will_ said:
crankedup said:
will_ said:
plasticpig said:
will_ said:
Personally I think share-holder activism is a good thing, but the minority of share-holders can't (and don't) have any right to hold sway over the majority....
They do actually; in certain limited circumstances. See Section 994 of the Companies Act 2006.The vast, vast majortiy of company activities require 50% or even 75% shareholder approval. I don't see why director remuneration should be any different. No-one is obliged to buy and hold shares in companies which are either not performing, or are over-paying their executives.
The fact is, the majority of shareholders are content. I'm sorry that you don't like that, but it would be wholly wrong for the minority to act against the evident wishes of the majority.
Because the people investing in the funds don't give two ticks about what the directors are paid, they only care about the performance of their investments. And if their funds aren't performing, they should be removing their investments - the managers will soon take note. Why don't they do that? Because in fact the company is performing (relatively) well, and if it isn't the fund managers will get out sharply.
If the investors really did care, they would take the time to look at what they are actually invested in. The fact that they (and you) can't be bothered shows how insignificant the "problem" as you see it really is.
If only 30% of shareholders object to something, the other 70% are in favour or don't care (i.e. are content). It is irrelevant if they are direct or indirect shareholders, because the indirect share-holders are easily able to remove their investments if they cared so deepely. The fact is, they don't - so you're barking if you think there's soon going to be some sort of lefty revolution.
crankedup said:
I have no more to offer regards your first para.
Agree that 30% vote from shareholders is insufficient to bring change or instruct changes, I have never suggested otherwise. It is not an irrelevance as to how an individual will have shares held, in fact it is the opposite IMV. Those with less time often invest in managed funds, certainly pension savers will. Your argument that individuals should not invest in particular companies only holds true in certain circumstances. However, when the companies remuneration packages are in question the shareholders should have, and soon will have, binding votes that will either agree or disagree with the proposals. It is not the case of saying 'he/she is paid to much so I won't invest' that would be plainly daft and not a basis of an investment strategy. This for me is the sole basis of the discussion, its not a matter of too much pay (although I think it is) but of shareholders having a binding vote on the matter. If it is to be in favour of a huge remuneration package and its voted through, then fine I wouldn't argue against it passed that stage, then I would consider if my investment is best placed within the company.
You need to explain what you mean by "binding" votes. Has there ever been a PLC in which more than 50% of the shareholders have voted agains the remuneration package of the directors? If so, what happened?Agree that 30% vote from shareholders is insufficient to bring change or instruct changes, I have never suggested otherwise. It is not an irrelevance as to how an individual will have shares held, in fact it is the opposite IMV. Those with less time often invest in managed funds, certainly pension savers will. Your argument that individuals should not invest in particular companies only holds true in certain circumstances. However, when the companies remuneration packages are in question the shareholders should have, and soon will have, binding votes that will either agree or disagree with the proposals. It is not the case of saying 'he/she is paid to much so I won't invest' that would be plainly daft and not a basis of an investment strategy. This for me is the sole basis of the discussion, its not a matter of too much pay (although I think it is) but of shareholders having a binding vote on the matter. If it is to be in favour of a huge remuneration package and its voted through, then fine I wouldn't argue against it passed that stage, then I would consider if my investment is best placed within the company.
Even if there are "binding" votes, do you think that suddently 50% of the shareholders will start rebelling, in preference to simply selling their shares in an under-performing, over-paying company?
Invidividuals can invest where they like, they can move pension funds if they don't agree with what they are invested in. Whether they will or not on the basis of remuneration would be an indicator as to how little most people care....
Soovy said:
crankedup said:
.......the ever increasing gap between wealthy and poor.
A 400% increase in that gap over the past ten years cannot be justified by any measure IMO.
Yes it can. A 400% increase in that gap over the past ten years cannot be justified by any measure IMO.
Some people are lazy and poor. And some work hard and do OK for themselves and their families. And so are very lucky and are wealthy.
Life isn't fair, it never has been, and my experience of "the poor" in this Country (many of whom have been clients going through the criminal justice system at one point or another) is that they don't seem to me to be short of money for fags and holidays, or indeed spending all afternoon in the Weatherspoons once their case has been heard and they've paid their fine.
Get real, cranked. You're envious, nothing more.
You should cheer up. You have a pension, and a nice car collection. Be grateful, and (to quote SKA heroes The Specials) "enjoy yourself - it's later than you think".
Edited by Soovy on Tuesday 1st May 17:43
Don't get me wrong, life has sometimes been tough, sometimes very tough and full of s
te, but like most people you get through it. I do like your use of The Specials line - a great band.
crankedup said:
Soovy said:
crankedup said:
.......the ever increasing gap between wealthy and poor.
A 400% increase in that gap over the past ten years cannot be justified by any measure IMO.
Yes it can. A 400% increase in that gap over the past ten years cannot be justified by any measure IMO.
Some people are lazy and poor. And some work hard and do OK for themselves and their families. And so are very lucky and are wealthy.
Life isn't fair, it never has been, and my experience of "the poor" in this Country (many of whom have been clients going through the criminal justice system at one point or another) is that they don't seem to me to be short of money for fags and holidays, or indeed spending all afternoon in the Weatherspoons once their case has been heard and they've paid their fine.
Get real, cranked. You're envious, nothing more.
You should cheer up. You have a pension, and a nice car collection. Be grateful, and (to quote SKA heroes The Specials) "enjoy yourself - it's later than you think".
Edited by Soovy on Tuesday 1st May 17:43
Don't get me wrong, life has sometimes been tough, sometimes very tough and full of s
te, but like most people you get through it. I do like your use of The Specials line - a great band.And to some extent I am baiting you, we'd probably get on alright you know.
But we do disagree about this whole remuneration thing. If someone can get themselves a deal like that then good luck to them. Don't hate the player, hate the game.
Sticks. said:
Your term bonus-driven reminded me of a senior banker interviewed on Newsnight some time back when bankers were headline news. His view was that he didn't need a bonus to do his job properly and the concept that he would do so without one he found slightly insulting.
Of course, no one needs a bonus to do their job properly, and their salary should sufice BUT if another company (or football team) offers them a better financial incentive then they are likely to jump ship. Wouldn't you? (of course you may love the company you work for but at what price?).fido said:
Of course, no one needs a bonus to do their job properly, and their salary should sufice BUT if another company (or football team) offers them a better financial incentive then they are likely to jump ship. Wouldn't you? (of course you may love the company you work for but at what price?).
I take your point, but I think there are many reasons why we work for the company we do (or indeed, ourselves). We've often read the argument that if the bonuses weren't paid, staff would quickly desert. That gives the impression that the only value those in the industry have is money, with no integrity, duty or loyalty, and I think that's unlikely and unfair.But maybe that's what the culture has created. And, as you say, if one's doing it... As Soovy says though, don't hate the players.
Easy to follow list for the lefties. You are wrong because:
1) Most shareholders, like myself, are happy with performance. While I've held them, the shares have been up about 30%. we like bob and want to keep him.
2) The bank I work for (not barc - non-domestic and not bailed out) would have to pay me overtime if they stop paying bonuses, and that would cost 500% more than the bonus at flat rate. I sure as st ain't working those extra 120+ hours a month so a shareholder who put in zero effort can walk off with all the rewards.
3) The barc board are significant shareholders. Bob's got millions of 'em, so he has a direct incentive to see div increases and share price gains, but he can't do it without well motivated staff.
4) Shares are for trading to make gains. If you can't live with risk or price drops then don't invest. Carping because you tried to buy and hold forever for the income, and are only now understanding how risky that is, is unproductive and ignorant.
Perhaps, given the quantity of emotive and envious bks in this thread, some of you'd be more at home reading the Socialist Shirker?
1) Most shareholders, like myself, are happy with performance. While I've held them, the shares have been up about 30%. we like bob and want to keep him.
2) The bank I work for (not barc - non-domestic and not bailed out) would have to pay me overtime if they stop paying bonuses, and that would cost 500% more than the bonus at flat rate. I sure as s
t ain't working those extra 120+ hours a month so a shareholder who put in zero effort can walk off with all the rewards.3) The barc board are significant shareholders. Bob's got millions of 'em, so he has a direct incentive to see div increases and share price gains, but he can't do it without well motivated staff.
4) Shares are for trading to make gains. If you can't live with risk or price drops then don't invest. Carping because you tried to buy and hold forever for the income, and are only now understanding how risky that is, is unproductive and ignorant.
Perhaps, given the quantity of emotive and envious b
ks in this thread, some of you'd be more at home reading the Socialist Shirker?Sticks. said:
heppers75 said:
.....working in senior management & board level roles in FTSE companies with folks in bonus driven roles that bonuses should be awarded for performance metrics as agreed and that will be a sliding scale with a greater bonus for greater performance.
Your term bonus-driven reminded me of a senior banker interviewed on Newsnight some time back when bankers were headline news. His view was that he didn't need a bonus to do his job properly and the concept that he would do so without one he found slightly insulting.Edited by heppers75 on Wednesday 2nd May 15:16
The point I was trying to make is that when people have a direct incentive they tend do perform better and I have a fair degree of direct experience on that over the years of having managed people in essentially similar roles, of similar capability and to a person the ones that were working with a lower basic but with the potential of higher total remuneration from a reward structure were by far the best performers.
Sticks. said:
Your term bonus-driven reminded me of a senior banker interviewed on Newsnight some time back when bankers were headline news. His view was that he didn't need a bonus to do his job properly and the concept that he would do so without one he found slightly insulting.
But, on the other hand, he'd likely admit that he may well end up doing it for the company across the street if his current company didn't pay one, and the other company did.In this uncertain world, it's a rare man who'll work for 100k a year when someone else's offering £1m a year for the same job. We don't need a bonus to do our job as well as we can, we just need one to keep doing it for our current employers.
Although employers must also believe you aren't easily replaceable.
Bonuses are a really interesting topic to people because there is a dichotomy between what people think bonuses do and the actual effect bonuses have on recipients. The Duncker candle problem for example.
In my view this pay-gap problem seems to be cyclical, a few individuals build great personal wealth in periods of favourable taxation. Then there is a crash and subsequently new taxation reduces the gap to start all over again. There doesn't seem to be any serious attempt to damp the cycle, in fact many of the tax changes made by governments actually accelerate the cycle.
Bonuses are a really interesting topic to people because there is a dichotomy between what people think bonuses do and the actual effect bonuses have on recipients. The Duncker candle problem for example.
In my view this pay-gap problem seems to be cyclical, a few individuals build great personal wealth in periods of favourable taxation. Then there is a crash and subsequently new taxation reduces the gap to start all over again. There doesn't seem to be any serious attempt to damp the cycle, in fact many of the tax changes made by governments actually accelerate the cycle.
I don't work in the financial sector, so have no real experience of current market conditions, but my perception is that companies are finding it harder to maintain the profitability of the boom years leading up to 2008, it will be very interesting to see what effect, if any, a period of relative austerity has on bonuses.
Few people would object to a bonus paid for truly exceptional performance in times of good profitability. When people like myself (a died in the wool capitalist somewhat to the right of Genghis Khan) begin to question bonuses is when performance does not appear to be exceptional, when profits are decreasing and share prices are (considerably) down.
In my market sector, the main people paid significant bonuses are sales people. The bulk of the bonus would be sales related, and next year's target tends to be this year's achieved figure plus a bit. There may be small percentage bonuses for non-sales related targets, but the bulk of any bonus would relate to doing better next year than last - selling more and generating more gross profit for the Company. I don't have a problem with that (at all), what I do have a problem with is paying a bonus for performance worse than achieved previously (after stripping out exceptional, not fair to expect to be repeated, events), and especially where the bonus appears to be taking the piss out of the shareholders. A wage yes, a good wage even, but not a bonus.
Few people would object to a bonus paid for truly exceptional performance in times of good profitability. When people like myself (a died in the wool capitalist somewhat to the right of Genghis Khan) begin to question bonuses is when performance does not appear to be exceptional, when profits are decreasing and share prices are (considerably) down.
In my market sector, the main people paid significant bonuses are sales people. The bulk of the bonus would be sales related, and next year's target tends to be this year's achieved figure plus a bit. There may be small percentage bonuses for non-sales related targets, but the bulk of any bonus would relate to doing better next year than last - selling more and generating more gross profit for the Company. I don't have a problem with that (at all), what I do have a problem with is paying a bonus for performance worse than achieved previously (after stripping out exceptional, not fair to expect to be repeated, events), and especially where the bonus appears to be taking the piss out of the shareholders. A wage yes, a good wage even, but not a bonus.
RYH64E said:
I don't work in the financial sector, so have no real experience of current market conditions, but my perception is that companies are finding it harder to maintain the profitability of the boom years leading up to 2008, it will be very interesting to see what effect, if any, a period of relative austerity has on bonuses.
Few people would object to a bonus paid for truly exceptional performance in times of good profitability. When people like myself (a died in the wool capitalist somewhat to the right of Genghis Khan) begin to question bonuses is when performance does not appear to be exceptional, when profits are decreasing and share prices are (considerably) down.
In my market sector, the main people paid significant bonuses are sales people. The bulk of the bonus would be sales related, and next year's target tends to be this year's achieved figure plus a bit. There may be small percentage bonuses for non-sales related targets, but the bulk of any bonus would relate to doing better next year than last - selling more and generating more gross profit for the Company. I don't have a problem with that (at all), what I do have a problem with is paying a bonus for performance worse than achieved previously (after stripping out exceptional, not fair to expect to be repeated, events), and especially where the bonus appears to be taking the piss out of the shareholders. A wage yes, a good wage even, but not a bonus.
So do you accept the premise that if the paradigm was to shift from in many cases artificially lower basic wages + a bonus on a sliding scale to a higher basic wage (in your terms I suspect a good wage) + a bonus for only truly exceptional performance then in reality the cost of employment to the businesses would likely increase and have the added issue of exposing them in the event they did make zero profit or RoE etc as they would be stuck with a higher wage bill than with the bonus structures as they stand?Few people would object to a bonus paid for truly exceptional performance in times of good profitability. When people like myself (a died in the wool capitalist somewhat to the right of Genghis Khan) begin to question bonuses is when performance does not appear to be exceptional, when profits are decreasing and share prices are (considerably) down.
In my market sector, the main people paid significant bonuses are sales people. The bulk of the bonus would be sales related, and next year's target tends to be this year's achieved figure plus a bit. There may be small percentage bonuses for non-sales related targets, but the bulk of any bonus would relate to doing better next year than last - selling more and generating more gross profit for the Company. I don't have a problem with that (at all), what I do have a problem with is paying a bonus for performance worse than achieved previously (after stripping out exceptional, not fair to expect to be repeated, events), and especially where the bonus appears to be taking the piss out of the shareholders. A wage yes, a good wage even, but not a bonus.
To try and use none banker examples which have thus far not seemingly been agreed with it is a bit like me deciding I will pay my sales folks £35k and 10% bonus as opposed to £25k and 10%-25% based on a sliding scale. My exposure is far less in lean times on the latter than the former but I do have to pay out much more when times i.e. profits are medium to good.
TwigtheWonderkid said:
crankedup said:
Millions of shares are held in management funds
Why, if according to you, the CEO is so useless??? will_ said:
crankedup said:
will_ said:
crankedup said:
will_ said:
plasticpig said:
will_ said:
Personally I think share-holder activism is a good thing, but the minority of share-holders can't (and don't) have any right to hold sway over the majority....
They do actually; in certain limited circumstances. See Section 994 of the Companies Act 2006.The vast, vast majortiy of company activities require 50% or even 75% shareholder approval. I don't see why director remuneration should be any different. No-one is obliged to buy and hold shares in companies which are either not performing, or are over-paying their executives.
The fact is, the majority of shareholders are content. I'm sorry that you don't like that, but it would be wholly wrong for the minority to act against the evident wishes of the majority.
Because the people investing in the funds don't give two ticks about what the directors are paid, they only care about the performance of their investments. And if their funds aren't performing, they should be removing their investments - the managers will soon take note. Why don't they do that? Because in fact the company is performing (relatively) well, and if it isn't the fund managers will get out sharply.
If the investors really did care, they would take the time to look at what they are actually invested in. The fact that they (and you) can't be bothered shows how insignificant the "problem" as you see it really is.
If only 30% of shareholders object to something, the other 70% are in favour or don't care (i.e. are content). It is irrelevant if they are direct or indirect shareholders, because the indirect share-holders are easily able to remove their investments if they cared so deepely. The fact is, they don't - so you're barking if you think there's soon going to be some sort of lefty revolution.
Although I started this thread centred on banks, I need to explain to you that the overpayment issue is not restricted to banks. The same problem exists in many Corporate Companies and shareholders have sat back for decades and let this problem happen. Now we have a European and American financial crisis shareholders are opening their eyes and at long last voicing their opinions. You believe this to be wrong in some way by using the silly argument that unhappy shareholders should sell their stock- strange. I say shareholders should have the benefit of binding votes rather than the current status. I would have agreed with your POV 20 or 30 years ago but times and attitudes change, clearly yours haven't.
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