City pay to be publicly disclosed |
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| Economy | |
| Written by Catherine Murray and ShareCast | |
| Thursday, 16 July 2009 | |
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Thursday's business headlines: City pay transparency, Rio Tinto employee detention, BT and swine flu The pay and bonuses of hundreds of high-flying City traders and dealmakers will have to be publicly disclosed under a Treasury-backed plan to curb excessive and risky remuneration. Alistair Darling, chancellor, wants banks to be more transparent about what they pay their top earners to expose them to more scrutiny from the media, public and shareholders, says the FT. Sir David Walker, heading the overnment's review of corporate governance in banking, believes that if the public and shareholders can see how banks operate, the excessive pay and risk-taking which caused the credit crunch can be curbed. Sir David will will also say non-executive directors and large shareholders must play a far bigger role in challenging banks management in order to prevent a repeat of the financial crisis of the past two years, the Times Online reports. Currently only board members including chairmen and chief executives currently have their remuneration disclosed but many traders in the City often earn far more than company directors. The proposed rules will apply to all banks with London offices, meaning the earnings of traders at Goldman Sachs, who have a £14 billion bonus pot this year, will be made public. The proposed clampdown will stop short of 'naming and shaming' the traders not on bank boards, instead proposing that their pay, bonuses and pensions be listed in bands. City figures however said the publication would start 'guessing games' in every bank and trading floor — and inevitably some identities would be flushed out, the London Evening Standard reports. Beijing accuses Rio Tinto of briberyThe diplomatic row sparked by China’s detention of four Rio Tinto employees grew last night when Beijing accused the Anglo-Australian mining company of bribing the entire Chinese steel industry. The state-owned China Daily newspaper quoted an unnamed “industry insider” claiming that Rio bribed each of the 16 Chinese steel companies involved in this year’s negotiations to set the benchmark iron ore price, writes the Times. BT moves call centre jobs back to BritainBT will bring at least 2,000 call-centre jobs in India back to Britain as it prepares to close about half its customer service operation on the sub-continent, it emerged yesterday, according to the Times. The Telegraph adds that angry shareholders on Wednesday attacked BT for its "botched handling" of Global Services, the disastrous IT services division which dragged the telecoms company to a £134m full-year loss. Amex cuts staff pensionsAmerican Express, the global financial services company, has effectively cut the pay of its 6,000 UK staff by stopping payments to its stakeholder pension scheme. It is the largest company to take such action and pensions experts fear that the decision could trigger a series of copycat announcements, reports the Times. Swine flu due to hit workforce in SeptemberAlmost one in eight workers are likely to be forced to stay at home with swine flu, according to government figures to be released on Thursday. Nine per cent of the workforce will be sick by the end of August, say the latest official forecasts, and up to 12 per cent in September, when the peak of the first wave of the swine flu pandemic in the UK is expected, writes the FT. Citigroup to increase scrutinyCitigroup is close to a secret agreement with one of its main regulators that will increase scrutiny of the US bank and force it to fix financial, managerial and governance issues. People close to the situation said that the deal had been discussed in recent weeks amid increased pressure on Citi from the Federal Deposit Insurance Corporation, the regulator, and could be finalised soon, says the FT. Calpers sues credit rating agenciesCalpers, the California state employees' pension fund and one of the most powerful fund managers in the US, is suing the three main credit rating agencies, saying they were negligent when they gave gold-plated ratings to mortgage derivatives that have since turned toxic, writes the Independent. The lawsuit adds to the growing pressure on the agencies – Standard & Poor's, Moody's and Fitch – over their role in inflating the credit bubble that turned spectacularly to bust. British industry energy bills to riseBritish industry’s energy bills are set to rise by 17 per cent over the next decade as a result of the government’s plans to cut carbon dioxide emissions. The warning emerged on Wednesday as ministers set out their strategy for tackling the threat of climate change and boosting renewable energy, reports the FT. Kidnapping bosses no longer in vogue in FranceThe new publicity-seeking trend among redundancy-threatened workers is to threaten to blow up their own factory. Almost 500 employees of the insolvent Canadian-owned telecommunications company Nortel warned this week that they would detonate 12 large gas cylinders at their plant in Châteaufort, west of Paris, unless they each received €100,000 in redundancy pay, says the Independent. And in other news...Ineos, the UK’s largest private company and one of the world’s biggest chemicals companies, is set to announce on Thursday that it has secured vital agreement from creditors to reset the terms of its €7.3bn ($10.3bn) debt load, according to the FT. Eurostar, the cross-Channel train operator, said yesterday that ticket sales to business customers had fallen by 20 per cent in the first six months of the year, as companies cut costs amid the recession, reports the Times. China’s economy accelerated significantly in the second quarter, with gross domestic product expanding by 7.9 per cent, ahead of analysts’ consensus estimates, according to the FT. |
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