Review: How greedy executives choked off growth 9 Aug 2019 Interest rates are ultra-low and earnings are at record levels, so why has corporate investment slumped? In “Productivity and the Bonus Culture”, economist Andrew Smithers points the finger at soaring executive compensation. His rigorous diagnoses call for some radical cures.
HSBC’s CEO volte-face puts chairman on the spot 5 Aug 2019 The board led by Mark Tucker forced out Chief Executive John Flint just 18 months after picking him to run the global bank. Finding a permanent replacement could take up to a year, leaving the bank adrift. Investors will hold the former AIA boss accountable for what happens next.
CEO exit leaves HSBC with worrying gap at the top 5 Aug 2019 John Flint has parted company with the Asia-focused lender after 18 months at the helm. The abrupt exit of a veteran banker overshadows decent earnings and a $1 bln buyback. Given mounting uncertainty around Brexit, a trade war and Hong Kong, it's a bad time to be adding more.
Old Mutual row shows merit of the quiet CEO payoff 31 Jul 2019 The South African insurer’s shares lost 5% after sacked boss Peter Moyo convinced a court he should get his job back, at least temporarily. A public slanging match looks damaging for all concerned. There’s a reason why warring boards and bosses usually settle disputes quietly.
GAM truce marks start of long rehabilitation 30 Jul 2019 The Swiss asset manager is burying the hatchet with a former employee linked to a $11 bln fund scandal that knocked 60% off its market value. Shelving litigation will help new boss Peter Sanderson focus on rebuilding the franchise. New inflows are an early sign the worst is over.
Santander’s Orcel offensive is double-edged sword 26 Jul 2019 The Spanish bank accused Andrea Orcel, the ex-UBS banker it backed out of appointing as CEO, of “dubious ethical and moral behaviour”. That calls into question Chairman Ana Botin’s original decision to hire him. This increasingly bitter battle will only produce losers.
Renault’s de-Ghosnification helps up to a point 25 Jul 2019 The French carmaker is parting ways with bankers and other consiglieri tied to former CEO, and recent Japanese jailhouse guest, Carlos Ghosn. It may help Chairman Jean-Dominique Senard put his stamp on the $17 bln group. But the government is still an obstacle to merger hopes.
Metro Bank tries cosmetic surgery on gaping wounds 25 Jul 2019 Chairman Vernon Hill will step down after the UK lender lost a tenth of its deposits. But the founder’s decision to stay on the board may undermine his successor. It’s far from the clean sweep Metro needs to restore confidence amid an accounting mess and collapsing profitability.
Boris Johnson’s political triumph will be fleeting 23 Jul 2019 Britain’s soon-to-be prime minister has won the office he long coveted. But to keep it, he must either pass a Brexit agreement that eluded his predecessor, persuade his party to leave the EU without a deal, or win an election. Rash promises have increased his chances of failure.
Ted Baker offers tricky embrace for private equity 22 Jul 2019 Shares in the seller of colourful shirts rose 15% on hopes of a buyout. A low valuation, and the opportunity to expand in Asia may appeal. But the likely involvement of hug-loving founder Ray Kelvin could deter some buyers. And the group’s sluggish growth will limit returns.
Aramco gives bankers new scope for Saudo-masochism 19 Jul 2019 A second crack at the Saudi oil giant’s stalled $100 bln IPO could mean different bankers. Spurned advisers can comfort themselves that the listing won’t be lucrative and may never happen. The reputational and other issues that plagued the first attempt have only intensified.
Suez boss gets helpful kick in derriere from Amber 18 Jul 2019 The 8 bln euro French utility, whose history includes the Egyptian canal’s construction, presents a juicy target for the activist. Bertrand Camus just took the reins in May, following years of crummy empire-building returns. He should welcome Amber’s thoughtful approach.
Where is StanChart’s chair when he’s most needed? 17 Jul 2019 CEO Bill Winters is under fire for calling shareholders “immature” for criticising his pay. But the bank’s board, led by José Viñals, sets remuneration. Having failed to sell the deal in the first place, the Spanish chairman should be the one deflecting shareholder discontent.
New breed of central bankers is harder to read 11 Jul 2019 Jerome Powell at the Fed and Christine Lagarde, nominated to be the next ECB chief, are lawyers by training. Their thinking is more fluid than predecessors whose economic tenets informed a world view. That has benefits, but also means it’s harder to predict how they will react.
Deutsche Bank accidentally boosts boutique model 10 Jul 2019 The lender’s enforced decision to shut its cash equities business raises the question of whether investment banks need armies of traders and analysts to back up stock offerings. A leaner platform could show they don’t. That would be a shot in the arm for smaller rivals.
Next BMW CEO’s best bet is greener cars 8 Jul 2019 The 44 billion euro automaker’s current boss Harald Krueger will in 2020 vacate one of the more attractive jobs in a tough industry. The company’s valuation and profitability put rivals to shame. To hold onto that lead, the new boss will have to focus more on electric vehicles.
Global central bank assault claims Turkish victim 7 Jul 2019 Desperate to boost growth, President Tayyip Erdogan has fired the country’s central bank chief. He’s the latest casualty of a worldwide attack on independent monetary authorities. The blow to confidence makes any cut in the main rate, held at 24% since September, more damaging.
Andrea Orcel could benefit from his own advice 5 Jul 2019 The former UBS investment bank boss is suing Santander for 100 million euros after the Spanish bank yanked an offer to make him CEO. A lengthy battle will further cloud the rainmaker’s future career. Breakingviews imagines what counsel the hard-charging banker might give himself.
ChemChina vexes Beijing’s bureaucrat dealmakers 4 Jul 2019 In an odd display of buyer’s remorse, the country’s envoy to Switzerland has slammed the $43 bln takeover of Syngenta in 2017. It hints at the complex politics of such M&A. The reaction also calls into question the many orchestrated mega-mergers involving state-owned giants.
Time to look beyond Europe for next IMF boss 3 Jul 2019 The international lender’s chief has always been European. Christine Lagarde’s exit will be a chance to drop the outdated convention. Any hope of salvaging the multilateral system means giving emerging and developing economies more clout. Competence matters more than nationality.