Pay

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.

Deutsche Bank’s bonus restraint goes only so far

18 Jan 2017

The German lender says it’s taking tough steps on pay after investors endured a hard year. Executives will waive all bonuses, and senior staff will lose some of their variable pay. But Deutsche has included loopholes for key staff, and fixed pay could always rise to compensate.

UniCredit fixed pay cuts are double-edged sword

11 Jan 2017

The Italian bank's chair cut his salary by 40 pct, following the example of new CEO Jean-Pierre Mustier. UniCredit pay was too high relative to peers, and restraint is welcome. Risks associated with cutting fixed as opposed to variable pay mean it's unlikely to catch on, though.

Sports Direct undercuts exec pay ideals

6 Jan 2017

The retailer’s bosses receive an apparently model mix of low salaries and performance-based awards. The former CEO’s fixed pay was less than a twentieth of Martin Sorrell’s at WPP. Yet an exemplary pay mix has failed to deliver either shareholder returns or good governance.

Exec pay is crying out for a race to the bottom

3 Jan 2017

Battles against corporate excesses are worthy but come unstuck all too quickly. Bosses keep getting paid more than their predecessors. To save capitalism, some could tender their services more cheaply. The tradition of the $1 CEO serves as a template. Even better: work for free.

Deutsche chair ought to have both hands on wheel

23 Nov 2016

Paul Achleitner's likely re-election at the German lender has riled some investors. On his watch, Deutsche Bank shares have slid nearly 50 pct. A thorough if belated management overhaul earns Achleitner some credit. He could get more by ditching board roles at Daimler and Bayer.

Deutsche bonus clawback can work even if it fails

18 Nov 2016

The struggling German bank wants to cancel former executives' unvested and previously suspended compensation awards. Deutsche Bank won't retrieve enough to boost capital meaningfully. But reassuring shareholders whose rewards have never matched employees' is still worthwhile.

Fund managers take long view by scrapping bonuses

23 Aug 2016

Star investor Neil Woodford is paying his staff fixed salaries, while former trade body head Daniel Godfrey is launching a trust on the same principle. Fund costs won't necessarily fall. But a bonus system can prompt unhelpful short-termism while ratcheting up overheads.