The Times today reports that Barclays' "high-rolling investment bankers" are about to receive bumper profits, despite the fact that the bank has to make large provisions for bad debts.
Barclays was not major beneficiary of the government's trillion pound bailout package. The bank wasn't recapitalized. Aren't these are a private matter?
However, I wonder about the shareholders of Barclays. I can't see how the shareholder's interests are served by simultaneously rewarding staff while at the same time covering their mistakes through making profit reducing provisioning for bad loans.
The sad fact is that shareholder rights are extremely weak in the UK financial sector. Insiders, through excessive bonuses and salaries, have been ripping off the owners of these institutions. It is time this stopped.
There is a need for a thorough review of corporate governance in this country. The objective should be to strengthen shareholder rights. It is time we stopped senior management from ripping cash out of the companies that they are supposed to run in the interests of its owners.
20 comments:
The shareholders are merely the Oysters following the Walrus and the Carpenter. Action should come from depositors: take your money away from bad banks and put it into good ones.
I found this blog post on the subject interesting.
http://davidbrin.blogspot.com/2009/04/blame-corporate-boards-and-change-them.html
I am always amazed at the lying and corruption that is the norm in British business. Just read a paper and it is full of stories about scams and rip-offs, misselling etc. The British boss is a habitual scum bag and liar and fraud. It is sad: don't do business with them.
I dont think the problem is exclusive to Britain. Anglo-Saxon business make the Ferengi look like angels.
maybe the "high-rolling investment bankers" are not the guys who made the duff loans? Maybe Barclays Capital and in particular those bankers were the reason that Barclays isn't the Brown government's bitch like Lloyds and RBOS?
If shareholder rights are extremely weak it's because the ordinary small shareholder doesn't matter. The don't matter because first, they can't be arsed to go to AGMs, and second, because the institutional shareholders - the ones who run pension schemes and buy and sell by the millions of shares - are relatively few but hugely powerful. Being relatively few, they're easy to do deals with to keep them happy.
I hadn't, though, noticed any change in the law which exempts banks from Corporation Tax on their profits, or from paying dividends to the major shareholders who run your pension scheme and mine.
Regardless of the rights and wrongs of pension schemes and the way they're run, and how they charge. That's where there could usefully be a massive shake-up.
Anon (20:49) clearly has his / her / its blinkers on in assuming the British are worse / less trustworthy / more devious / greedier than others. Try the Americans, any African country, or pretty much any country east of GMT+1.
formertory, sorry but banks pay corporation tax and dividends go to all shareholders not just the big ones and if you don't like shareholder rights in the US or UK, try Russia or China. In fact, I'd like someone to point out a country whose shareholder rights are better.
Alice, although Barclays may not have been a major direct beneficiary, indirectly it most certainly was. That is like saying that a car component manufacturer would not benefit from a bailout of a car assembler.
The industry sector they are in has been hosed with public money. I think arguing that they are somehow insulated from the gains of the public purse is a bit trite.
Having fought my way through a blizzard of Anonymouses, anonymous @12:11, I know a few things about corporation tax, thanks, oh, and dividends too. I think you've rather misunderstood me but it certainly isn't worth fighting about.
sorry, formertory if I underestimated your knowledge about corporation tax and dividends but you'd be surprised what people think is true about banks and isn't.
Did you mean they minimise their corporation tax bill? Yeah so what? All half-way competent companies do so - as they should, tax is simply a cost just like any other. Do you mean there are different share classes out there that pay different rates? Again fail to see the outrage here, cough up a few billion in the midst of a financial meltdown for a bank everyone claims is going tits up and I think you too can get some of those deeply discounted prefered shares Qatar got.
Anon at 13:52, sorry but what you are saying is not only untrue but almost the opposite of what happened. If you look back you can see the government trying to bully BARCL into taking government "largesse" and lots and lots of rumours of how they were going the same way as RBOS and Lloyds - I am sure none of those rumours were from the government at all.... just wierd how it was Treasury mouthpiece Peston who kept harping on about it. BARCL stuck two fingers up at the government, weathered the storm and now are reaping the rewards.
Also their sector wasn't hosed with money, a few select banks were. There were alot of announcements that either weren't taken up - anybody insured their debt yet? - and alot that weren't credible - anyone honestly believe the government could have covered ALL retail deposits?
To what extent has Barclays used the Special liquidity Scheme?
Have the details of this even been published yet?
Chefdave.
Fish rots from the head down. From the thoroughly corrupt liar Gordon Brown on down, the UK's governance is rank and reaking. I wouldn't trust any of them and I would write contracts to put all the risk back on anyone who is British.
That's the good thing about shares, you can sell if you don't like what's going on. But looking at BARC, i don't think the shareholders will be complaining anytime soon.
Why don't you rail about WPP Alice? They also pay out about 60% of their profits to employee's - pretty similar to Barclays. Top law firms and accountancy firms have similar ratios.
But perspective is not your strong point is it? Banks = bad. Must be nice to see the world in such black and white (black and blacker?) terms....
Anon, I also think the bank bashing is overdone but at the end of the day a meltdown of WPP wouldn't and didn't cause a global recession.
We need to be clear whether we're citing the banks for unfair compensation structures (when they are in line with other industries depending on key staff)) or bad business practices. I agree about the latter, but not the former.
Alice doesn't seem to be able to tell the difference though. Her mentality is "banks = bad" and she doesn't bother to think or use peer data to validate her assumptions they are ripping shareholders off.
The UK's construction PMI beat expectations, but the sterling didn’t change agains the dollar and the euro after the announcements.
http://www.ac-markets.com/forex-resources/currency-exchange-rates.aspx
I was expecting on my platform a rally but the trend let me hanging ….
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