Hadas: Misbehaving wages keep economists baffled 7 Jun 2017 Conventional economic theory says wages start to rise when labour markets tighten. It isn’t happening in the U.S., Britain, Japan or Germany. Many semi-plausible excuses and partial explanations have not solved the mystery. That leaves central bankers in a quandary.
Complex pay ties British companies in knots 7 Jun 2017 Tesco paid boss Dave Lewis a 142,000 pound allowance to move closer to work, while Burberry’s Christopher Bailey got a big share award at a delicate time. Both controversies are a distraction. If they kept pay simple, companies and investors could focus on more pressing issues.
Mark Carney’s inflation fight hits close to home 2 Jun 2017 Bank of England support staff are threatening to strike over a sub-inflation pay rise. Across the UK economy, rising prices are squeezing incomes. This hits the least well-off the hardest. But it would be hard for the BoE governor to undermine his efforts to keep prices in check.
Publicis pay hike shows where real power lies 1 Jun 2017 Long-time boss Maurice Lévy will receive 2.8 mln euros as chairman – more than he was paid as CEO. After 30 years in charge of the advertising group he has much to teach his successor. But his presence on the board inhibits fresh thinking at a firm that has struggled for growth.
Britain’s joyless job boom is nothing to celebrate 17 May 2017 A record three of every four working-age Britons is employed. But prices are rising faster than wages, and a post-Brexit crackdown on immigration threatens to limit further expansions in the workforce. That makes declining productivity an even bigger cause for alarm.
Review: Piketty is more stimulating when he’s wild 12 May 2017 Too much of the economist's bestseller on inequality was standard-issue theory. As a new anthology of essays on the book makes clear, much is wrong or missing in his reasoning. A critic’s call for "wild Piketty" rings true. The topic needs a broad, multi-disciplinary approach.
Hadas: Solidarity is cure to Baumol’s cost disease 10 May 2017 William Baumol showed how differences in productivity put wage pressure on artists and other inefficient workers. The economist, who died last week, was right, but his analysis was too individualistic. The challenge is to find fair ways to share out the fruits of prosperity.
Cheap boss is a luxury Bovis can’t afford 2 May 2017 The troubled UK homebuilder's investors approved a hefty pay package for its new boss. He could earn over 100 times the average UK construction worker, up from 76 times for his predecessor. A politically incorrect salary is the price Bovis pays for a much-needed turnaround.
UK fund merger may tempt staff more than investors 2 May 2017 Aberdeen and Standard Life have set aside a reported 35 million pounds to retain star workers after they merge. The cost savings should be bigger and Aberdeen’s latest results support the strategic rationale for the deal. Yet market moves suggest shareholders are sceptical.
Credit Suisse pay retreat puts chairman on spot 18 Apr 2017 The Swiss bank has bowed to investor pressure by proposing cuts to 2016 bonuses awarded last month and a cap on payouts for this year. New say-on-pay rules necessitated the climbdown. The episode shows an embarrassing lack of foresight by the board and Chairman Urs Rohner.
Activism prods GAM in right direction 18 Apr 2017 The Swiss hedge fund group will review compensation and cap its CEO’s pay because of pressure from investor RBR. The activist’s more disruptive plans may not win backing from other investors. But it can claim credit for forcing change in an industry resistant to shakeups.
BP’s bonus rethink is still kind to Bob Dudley 6 Apr 2017 The British oil major has caved to shareholder pressure and cut 2016 pay for its chief executive by 40 pct. Dudley has cleaned up BP since the Gulf of Mexico spill. But his latest long-term incentive plan still positions him comfortably ahead of his domestic peer group.
Britain is appropriate spearhead for bonus rethink 5 Apr 2017 UK ministers want to cut so-called long term incentive plans from executive pay. Such schemes can work, but all too often don’t. Turning them into less opaque deferred bonuses could preserve domestic competitiveness, while aligning Britain with peers that value greater clarity.
Lowball bank pay targets are lesser of two evils 27 Mar 2017 Barclays and Standard Chartered's bosses will get bonuses even if their banks don't earn back their cost of equity. Unstretching targets, though, reflect the fact neither lender has said when it will start making an economic profit. Paying less won't bring that moment closer.
Credit Suisse CEO payout is undeserved 24 Mar 2017 The Swiss bank is awarding boss Tidjane Thiam $12 mln for 2016, despite its $2.7 bln loss and a potentially dilutive capital raise. Thiam has done well on costs and solvency. But whatever the board says, he initially mangled the bank's strategy and thus its reputation.
Deutsche Bank bonus payout is bigger than it seems 22 Mar 2017 The German lender said its 2016 variable compensation was almost 80 pct less than in 2015. But factor in 1.1 billion euros of “retention awards” and the cut looks less extreme. The need to avoid an exodus of key staff helps explain the gap between rhetoric and reality.
Glaxo boss pay cut is a false economy 15 Mar 2017 The pharmaceutical group will pay new Chief Executive Emma Walmsley a quarter less than predecessor Andrew Witty, on account of her inexperience. Laudably, GSK was responding to shareholder pressure. Yet the cost of inexperience could easily outweigh the salary savings.
VW can regain trust with sweeping pay reform 22 Feb 2017 The troubled carmaker plans to overhaul its ill-designed executive pay scheme. This is an opportunity to start rebuilding shareholders’ confidence. Essential changes include turning managers into entrepreneurs, introducing pay clawbacks and giving investors more say on pay.
Audi’s gender equality plea lacks horsepower 6 Feb 2017 The German premium carmaker made an emotive call for gender pay equality in a Super Bowl TV commercial. The cause is honourable. But the message came from a company with no women on its executive board. Binding legal rules are needed to turn fine ideals more quickly into action.
Gary Cohn banks perfect hedge against Trump role 25 Jan 2017 Cashing out of Goldman with the stock near a high and helping the Dow top 20,000 is worth at least $100 mln to the bank's ex-No. 2. Not only is he an early beneficiary of the new regime, he's protected if the policies he promotes as the president's top economic adviser fail.