Brexit - Creating a Cuntocracy - Now with 4d chess option

#8902

Austerity is one aspect, but businesses almost universally kept wages stagnant, but found money for share buy back schemes and the like - all of which accrue yet more wealth to those at the top as they get shares as bonuses. So the staff see the bosses getting even richer whilst they get no pay rises and no investment in necessary equipment at work, and shafted by the government at home. These bosses claim they are paid mega bucks for their performance but the only thing that performs is the share price. When they fuck up they get paid to leave, unlike all the staff they sack to prop things up. And now they ‘find’ money for Brexit - and please don’t try and tell me they have been saving up - when they couldn’t find money for anything in the intervening years.

If you want to understand why i’m a bit bitter about this, look at CSC/DXC and their CEO Mike Lawrie (including his previous at Misys) … I worked for CSC up to 2013 and saw the way he behaved. And they (execs) are almost all just like him.

Brexit will be a gold plated opportunity for these companies to strip away any remaining worker protection, so despite their protests they’ll be fine and they’ll be in a much more profitable place afterwards

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#8903

A share buyback can be as simple as a debt for equity exchange. While some of these schemes were no debt nefarious in purpose, the majority would be well founded.

There is a failing in Corporate Governance not just in the UK in terms of income disparities. This failing is compounded by the way the views of the indirect owners of the vast bulk of these shares (You and I via our pension schemes or index holdings) are simply ignored.

I would agree that the disparity between the earnings of management and employees is unpleasant at best. It is well worth remembering that the gap between the richest and the poorest grew at its fastest rate during the latter part of the Blair/Brown Government. Our market driven system has proved very efficient at generating wealth, however it has also proved ineffective at redistribution of this wealth. This is a market failing that typically can only be solved by Government intervention.

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#8904

When the company’s money is used to buy back shares which mean the people making that decision get more personal money then im struggling to describe it as anything other than dodgy

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#8905

What do you mean by ‘the company’s money’? Ultimately, the company belongs to the shareholders. If the management are heavily invested then there are very clear Corporate Governance rules determining what they can and can’t do about interfering in the market for their own shares. Ultimately, the managements are agents for the shareholders who should oversee their activities closely.

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#8906

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#8907

You forgot the printing of vast amounts of money.

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#8908

Which, as we all know, happens, not !

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#8909

No I didn’t Bob. What do you think this is about:

Quantitative easing had one purpose, to avoid an asset price deflation through purchases and cheap money. If it created a bit of inflation that would have been a bonus. One plausible interpretation of the intentions of Austerity was to cut spending while simultaneously inflating away the debt accrued from any slowdown.

It failed in creating sufficient inflation although the asset price support worked well.

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#8910

Actually shareholder oversight is pretty good in the UK as the major FMs are red hot on it because it makes them money. Anything else that concerns you is likely to be a failing in current Corporate Governance legislation.

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#8911

I think that improved corporate governance is necessary, but it’s hard to see where it will come from. I would like to see funds where part of the mandate is to put explicit pressure on companies that have extreme remuneration systems, and pay execs more than 20x the median salary. But I don’t think there is much cap for this either from investors or fund managers.

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#8912

Why would you bite the hand that feeds you ?

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#8913

But I’m an investor, via my pension. I should ask them.

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#8914

Ask away. I wonder what will happen ?

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#8915

I would prefer to have the agency issues between the FM and the Fund members dealt with first. The level of fees charged is scandalous, even in a passive environment. The Governance issues and scandals involving underfunding of pensions schemes are more pressing issues. I would jail those responsible for underfunding in the event of a liquidation. Effectively the firm has been trading while insolvent and helping themselves to free funding from its employees.

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#8916

Surely underfunding pensions would fall foul of the wonderful FM governance / oversight ?

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#8917

Mine is a defined contribution scheme. The fees are really clever - 1% sounds very little, but considering they actually do basically fuck all, that’s 1% of the entire fund value disappearing every year.
I agree on the underfunded pension fund points - there should be no dividends while a defined benefit scheme is underfunded. I can’t see why this is not the case. I know that they try to smooth any underpayment as it will take time to actually affect pensioners, but they are implicitly putting dividends above a company liability.

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#8918

It has being going on for years from Maxwell plundering his company schemes to the likes of Green at BHS not paying enough into them. I don’t understand how Green was able to do this, but it appears what he did was in line with the letter of the law as he is still at large. I presume the appropriate deductions were made from his employee’s salary packets so perhaps it was the employers contribution that went astray.

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#8919

Which all leads back nicely to my “oversight happens - not !” statement upthread.

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#8920

Hence the need for legislation. In most cases the market will provide oversight but in the case of outright fraud, lax auditing or regulatory capture (see Ireland 2008 for the combined effects of all three) there is little you can do.

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#8921

From a friend on VisageParchment:
New Old Carols, No 94:
I saw no ships come sailing in
On Christmas Day
Or any day,
I saw no ships come sailing in
‘cos Seaborne had none in the first place

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