Great articles to invest some of your time in.
You can’t keep up with the soaring pay of Britain’s fat cats. By 3am Friday I had only half-finished an article on income inequality, so I posted my photos of the St Paul’s protests [1] and parked my chin-stroking for next week.
But a week is a long time in executive pay bloat.
Later that very day, a new report thudded into our consciousness, weighed down by all the ink needed to print all the zeroes at the end of a FTSE 100 directors’ paycheck.
According to Income Data Services’ latest report – a steal for fat cats at £460 [2] a pop but summarised by the BBC [3] for the rest of us – the pay of directors of FTSE 100 businesses rose 50% over the past year.
This means earnings of almost £2.7 million for the average director of a FTSE 100 company! And these aren’t even the bosses we’re talking about here, just any old director. (Chief execs had to make do with a paltry 43% rise in a year).
As a result of the IDS report, the subject has had another thorough airing, and my little contribution is going to look as significant as the annual salary of a secretary that’s accidentally paid into the bank account of her blue chip boss – i.e. pretty much a rounding error.
So I won’t spoil my damp squib thunder by venting any more outrage now.
Instead, for more insight try Investors Chronicle economics editor Chris Dillow’s blog, where he points out [4] that all the usual reasons for sky-high executive pay don’t cut it, and concludes:
Given all this, you might wonder what the real reason is for bosses’ high pay. Simple. Power. Bosses, generally, might not have the power to create super-efficient high-performing firms, but they do have the power to extract rents from shareholders and workers
Like some City traders, they must, in effect, be bribed not to plunder the firm’s assets.
From the point of view of shareholders, the small theft that is a multi-million pay-packet is better than the large theft of wilful mismanagement.
The lunatics [5]
From the money blogs
- It’s all about margin of safety – Mr Money Moustache [6]
- Terry Smith: The Big Bang remembered – Straight Talking [7]
- Investing based on PE10 market valuation – Oblivious Investor [8]
- A big list of behavioural biases – The Psy-Fi blog [9]
- Earnings versus net wealth – DIY Income Investor [10]
- Bernstein: European stocks look cheap [Video] – Morningstar [11]
- Ferri: Buy, hold and rebalance works [Video] – Morningstar [12]
- Momentum loses its momentum – Swedroe/MoneyWatch [13]
- Seven inspiring business women – The Digerati Life [14]
- Downsizing is the new equity release – The Finance Blog [15]
Buy of the week: I shot Friday’s St Paul’s protest photos using a Panasonic TZ10 [16]. It’s the first compact camera I’ve ever used that gives SLR-like results (though it’s not as flexible).
Mainstream media money
- Scotland’s first goldmine to open in 2013 – Business Week [17]
- Currency Wars – The Economist [18]
- Annuities vs. Dividends [A good comment thread] – Motley Fool [19]
- How to sack slackers and boost employment – FT [20]
- Consider some ‘unloved’ investments – FT [21]
- Not all inflation-proofing products are equal – FT [22]
- All hail the new Nifty Fifty – FT [23]
- Deadline looms for solar investors – FT [24]
- FTSE 100 set for best month since 1990 – Telegraph [25]
- Property demand reaches four-year high- Telegraph [26]
- Geoffrey Boycott’s home ownership dispute – Telegraph [27]
- Junior ISAs launch next week – The Guardian [28]
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