By Dina Medland in London
Surely they weren’t ‘burying the news’?
On Budget Day the loss-making Royal Bank of Scotland announced it had awarded bonuses in deferred shares amounting to almost £16 million to its top management team – just a little less than the £17.4 million that was awarded a year ago.
Just last month RBS reported a £7 billion net loss for 2016. This reflected an unexpected fine – amounting to $3.8 billion - levied by the US authorities for the ‘mis-selling’ of mortgage securities that contributed to the financial crisis. RBS then put £6.7 billion aside to cover litigation by the US Department of Justice.
The BBC quoted experts as saying that RBS's potential US penalty could fall anywhere between $12billion (£9.8 billion) and $20bn (£16.4 billion).
Since its bailout by the government (and therefore the taxpayer) during the financial crisis, RBS has reported losses amounting to more than £58 billion over nine consecutive years. The bank is not expecting to break even until 2019, and these announced bonuses will not be paid out before 2020.
But the Office of Budget Responsibility said on Wednesday that the government was already sitting on a £29.2 billion loss from bailing out RBS, including interest costs.
The Chancellor of the Exchequer Philip Hammond said he was “uncertain” as to when the Treasury would be able to sell off any of its 73% stake. Pity the taxpayer?
The air is buzzing with the prospect of change when it comes to corporate governance amid Prime Minister Theresa May’s review. In a speech she made even as she turned into the sole contender for the position of Prime Minister, Mrs May flagged up a dual mission on corporate governance: tackling soaring executive pay and putting worker representatives on UK plc boards. There was a stunned silence.
Since then, it has been reported that Mitie, the cleaning and caretaker outsourcing group, is understood to be considering plans to appoint a worker director in reforms being implemented by Phil Bentley, its new chief executive.
Sports Direct made the headlines this week– again – this time for its decision to put a worker representative on its board. But that has been swiftly followed by general derision, as its working practices continue to be under scrutiny and the move is widely being seen as a token measure rather than an overhaul of corporate governance.
The Institute of Directors, in a letter to The Guardian says that Sports Direct has become “the media’s poster-child for corporate governance failings.”
Is the notion of worker representation in boardrooms dying a death before the conversation has even begun?
LVMH, the world’s largest luxury goods company by revenue, is working on an ecommerce site that would bring together all of its brands as well as those of its competitors on one portal, the Financial Times reports.
No comment from LVMH, but this “would be the first major digital move since LVMH hired Ian Rogers from Apple in 2015, in the newly created role of chief digital officer, to lead the expansion of the French group’s online retail” says the FT