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Thread: 110m bonus! Can an annual bonus of this size ever be justified.

  1. #31
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    In the latest news the major has his ego stroked while being groomed.
    17,410,742 people said LEAVE!

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    Quote Originally Posted by Sheepy View Post
    In the latest news the major has his ego stroked while being groomed.
    Very Good!

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    Some excellent posts here. It is good to see some intelligent debates that show respect and do not resort to daft extremism.

    To be fair to Fairburn, the criterion for his bonus was agreed in advance by the board. It was the massive and unexpected rise in their profits, triggered by government incentives to house builders, that resulted in his enormous bonus. It could be said that the board should have been more far sighted and put some limit on this but they are not employed to be social engineers. And the company made huge profits from which their shareholders also benefitted. I think that such bonusses and/or pay awards are indeed obscene - and also unnecessary - I do not believe that those who receive such pay are really any more gifted, at least to that extent, than many others who could do their job for a fraction of their pay. This sort of company activity results from a general lack of oversight except by those who have a mutual interest in such bonus and salary awards, namely members of PLC boards. Why to they pay themselves so much? Because they can! Shareholders do not really care enough as their holdings are often a small part of their portfolios, so there is no specified limits to how they can behave (nothing changes unless the company losing significant money) unless government acts to put some limitations on pay awards and bonusses.

    This is not a simple issue however, especially for those starting businesses. The UK does penalise failure in business rather harshly compared with the USA (say) - compare UK bankruptcy with the the USA Chapter 11. Somewhere in the middle between these is probably the way to go.

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    Quote Originally Posted by Major Sinic View Post
    Very Good!
    Barry made me do it,he is such a minx.
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  5. #35
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    Quote Originally Posted by grumzed View Post

    This is not a simple issue however, especially for those starting businesses. The UK does penalise failure in business rather harshly compared with the USA (say) - compare UK bankruptcy with the the USA Chapter 11. Somewhere in the middle between these is probably the way to go.
    Bollocks to that.

    I worked in HMRC's Phoenixing unit for a while. If Fairburn can make telephone numbers then good luck to him. Maybe he will spend it on British women and drugs then the money will stay in the country and that will do the economy the world of good.

    But the average bankrupt leaves a trail of misery before he or she finally gets that invite to Carey Street and the best solution is less touchy feelie, oh dear there I was trying to save the world and Auto Trader cut its dividend, crap from the Guardianistas and the placing of the offender's head on a door jamb and having the door closed smartly. I mean a decent, old fashioned sort of door of course, not the current cardboard rubbish.

  6. #36
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    Quote Originally Posted by Major Sinic View Post
    Secondly introduce a top income tax rate band of up to 80% with associated legal reforms to prevent to prevent aggressive tax avoidance and tax evasion.
    I spoke about this sort of thing with a mate of mine who was looking after 2tn or so of assets and he told me that it wouldn't really change anything. Oh sure the Treasury would benefit, but the CEO would still get the same post tax as if the tax rate was 40% or 50%. Their tax bill would just be spread across the company world wide.
    Socialism is a philosophy of failure, the creed of ignorance, and the gospel of envy, its inherent virtue is the equal sharing of misery.

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    Quote Originally Posted by Borchester View Post
    Bollocks to that.
    Back to the usual level of debate then!

  8. #38
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    Quote Originally Posted by Borchester View Post
    But the average bankrupt leaves a trail of misery before he or she finally gets that invite to Carey Street and the best solution is less touchy feelie, oh dear there I was trying to save the world and Auto Trader cut its dividend, crap from the Guardianistas and the placing of the offender's head on a door jamb and having the door closed smartly. I mean a decent, old fashioned sort of door of course, not the current cardboard rubbish.
    Maybe that is right but I guess you were only looking at those who failed and/or were chancers. You clearly were not sympathetic. I started a limited company and ran it successfully for 14 years when I sold out (reluctantly) to a PLC and then later became a director there (and much better paid than I ever paid myself). There is significant risks in starting a company here because you risk a lot personally and it is hard to start again. The Hi tech business I was in had a bust-boom 5 year cycle so it was difficult to maintain and grow with a difficult balance between hiring and purchasing expensive software and hardware in the good years then having to tighten belts in the hard years. I never had to make anyone redundant and all staff were paid well. It is much easier to start such a company in the USA and much lower risk (almost none whatsoever) which goes too far the other way. However, this is one reason why the USA is good at producing successful startups. It also produces Donald Trumps however, whose businesses have been chapter 11 several times at the expense of others.

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  10. #39
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    Quote Originally Posted by boggart View Post
    I spoke about this sort of thing with a mate of mine who was looking after 2tn or so of assets and he told me that it wouldn't really change anything. Oh sure the Treasury would benefit, but the CEO would still get the same post tax as if the tax rate was 40% or 50%. Their tax bill would just be spread across the company world wide.
    As a pragmatist I accept your broad assertion. The fact is that poor decision making and reciprocal favours by the Directors Remuneration Committees across many Public Limited Companies leads to obscenely large payments like this, which bear no resemblance whatever to the positive contribution or commercial abilities of the recipients.

    The majority of shareholdings of any real size are controlled by fund and pension investment managers on behalf of the individual investor who are interested in the bottom line, and as in this case the sum total of the directors bonuses is a small fraction of the total and therefore not worth disputing. This however does not make it right.

    My concerns are several. If I and many tens of thousands of moderate centrist supporters of a mixed economy recognise this as obscene greed facilitated by the old pals act, in other words an unacceptable facet of capitalism, with what moral stance do we reject the undoubted evils, injustices and idiocies of Marxist Labour's policies.

    I was taken to task, quite understandably by Lefty Lib, for advocating a draconian tax system which controlled such excesses, and in doing so betraying the Conservative values and adopting Labour ones - heaven forbid!! I don't think I did because Lefty, who I like but disagree with at almost every turn, if he is as he claims a true follower of Corbyn and McDonnell would advocate these type of draconian tax measures on middle management, successful tradesmen and aspiring professionals at as little as 80,000 per annum , not above as I do, on greedy and undeserving executives who through the poor management of their peers, receive many times the income they deserve, earn or are worth, which would be still measured in low millions. These massively excessive payments, however insignificant in the broader picture are ultimately at the expense of both investor and employee. It should be remembered that the directors of the vast majority of plcs are employees of the shareholder and not majority owners in their own right.

    For our present economic system to survive and continue to prosper and provide the prosperity to our nation under both Conservative and moderate Labour Governments over recent decades, in the face of threat from John 'My ambition is the downfall of capitalism' McDonnell and the present Marxist Labour opposition, we need to control its excesses
    o which Jeff Fairburn's obscen bonus is but a highly publicised example.

  11. #40
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    Quote Originally Posted by grumzed View Post
    Maybe that is right but I guess you were only looking at those who failed and/or were chancers. You clearly were not sympathetic. I started a limited company and ran it successfully for 14 years when I sold out (reluctantly) to a PLC and then later became a director there (and much better paid than I ever paid myself). There is significant risks in starting a company here because you risk a lot personally and it is hard to start again. The Hi tech business I was in had a bust-boom 5 year cycle so it was difficult to maintain and grow with a difficult balance between hiring and purchasing expensive software and hardware in the good years then having to tighten belts in the hard years. I never had to make anyone redundant and all staff were paid well. It is much easier to start such a company in the USA and much lower risk (almost none whatsoever) which goes too far the other way. However, this is one reason why the USA is good at producing successful startups. It also produces Donald Trumps however, whose businesses have been chapter 11 several times at the expense of others.
    Very similar to my own history. Over eighteen years I developed my own group of small companies which I took public (AIM) retaining a majority shareholding. The company was with my agreement acquired by a larger private company and following an agreed two year exit plan, I left on good terms. Still being in my early fifties I became Chairman of a financial services company, a plc, where I witnessed first hand the machinations and mutual back scratching of an Executive Remuneration Committee, which I reformed. While many if not most operate for the benefit and in the interests of their company, a sizeable number do not and Persimmon is, I suggest, an indisputable example.

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