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| We can only address pay imbalances if we can see them | We can only address pay imbalances if we can see them |
| (about 17 hours later) | |
| BBC fears transparency will push up salaries; it might, but secrecy just serves to hide unjust disparities | |
| Wed 19 Jul 2017 19.43 BST | |
| Last modified on Mon 27 Nov 2017 19.52 GMT | |
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| The BBC fought against publishing the salaries of its highest-earning performers because it thought a list would serve to drive up salaries in the media industry. Its worry may be justified. In the wider world of big public companies, transparency and inflation have been co-travellers. | The BBC fought against publishing the salaries of its highest-earning performers because it thought a list would serve to drive up salaries in the media industry. Its worry may be justified. In the wider world of big public companies, transparency and inflation have been co-travellers. |
| When Imperial Brands, the cigarette firm, wanted to boost the pay package of its chief executive, Alison Cooper, this year it argued that she was being paid “significantly below the average for companies of our size”. The plea, thankfully, was rejected by shareholders who noted that Cooper had collected £18m over six years so was not in a position to plead poverty. | When Imperial Brands, the cigarette firm, wanted to boost the pay package of its chief executive, Alison Cooper, this year it argued that she was being paid “significantly below the average for companies of our size”. The plea, thankfully, was rejected by shareholders who noted that Cooper had collected £18m over six years so was not in a position to plead poverty. |
| Such try-ons often succeed, however. Does that make transparency a bad thing? Of course not. If deep problems like the gender pay imbalance are going to addressed, it is useful to start by putting the facts on display. | Such try-ons often succeed, however. Does that make transparency a bad thing? Of course not. If deep problems like the gender pay imbalance are going to addressed, it is useful to start by putting the facts on display. |
| Companies are squealing about the government requirement to publish data on gender pay imbalances next year. They should stop complaining and start thinking of remedies. TSB, which this week revealed its wide pay gap, is almost the only big company that sounds enthusiastic about improving matters. | Companies are squealing about the government requirement to publish data on gender pay imbalances next year. They should stop complaining and start thinking of remedies. TSB, which this week revealed its wide pay gap, is almost the only big company that sounds enthusiastic about improving matters. |
| “Transparency is not the problem, greed is,” says Stefan Stern, director of the High Pay Centre. He’s right. | “Transparency is not the problem, greed is,” says Stefan Stern, director of the High Pay Centre. He’s right. |
| Drax suddenly looks full of energy | Drax suddenly looks full of energy |
| That’s an imaginative hire by Drax. It is getting a former chief executive of the World Wide Fund for Nature on the board as a non-executive director. Whether David Nussbaum’s arrival will be enough to persuade sceptics that burning compressed wood pellets is a sustainable way to produce energy is another matter. But the appointment shows Drax is more than happy to fight its corner in the great pellet debate and is not alone. | That’s an imaginative hire by Drax. It is getting a former chief executive of the World Wide Fund for Nature on the board as a non-executive director. Whether David Nussbaum’s arrival will be enough to persuade sceptics that burning compressed wood pellets is a sustainable way to produce energy is another matter. But the appointment shows Drax is more than happy to fight its corner in the great pellet debate and is not alone. |
| Imagination, born of necessity, is also the guiding spirit of Drax’s strategy these days. A year ago, the business could be regarded as an exercise in managed decline, albeit with the help of its lucrative biomass subsidies. Coal, which is burned in three of the six units in the giant North Yorkshire plant, will be off the grid by 2025 on current government plans. As for biomass, which is in the other three units, the former chancellor George Osborne changed the outlook for the worse when he overhauled the subsidy regime in his 2015 budget. | Imagination, born of necessity, is also the guiding spirit of Drax’s strategy these days. A year ago, the business could be regarded as an exercise in managed decline, albeit with the help of its lucrative biomass subsidies. Coal, which is burned in three of the six units in the giant North Yorkshire plant, will be off the grid by 2025 on current government plans. As for biomass, which is in the other three units, the former chancellor George Osborne changed the outlook for the worse when he overhauled the subsidy regime in his 2015 budget. |
| Drax still has its previously agreed subsidies for biomass, which provide “high levels of visibility through to 2027”, as the chief executive, Dorothy Thompson, puts it. The big question, however, was what new tricks Drax could find. An answer of sorts is now emerging. | Drax still has its previously agreed subsidies for biomass, which provide “high levels of visibility through to 2027”, as the chief executive, Dorothy Thompson, puts it. The big question, however, was what new tricks Drax could find. An answer of sorts is now emerging. |
| The easy-to-understand part was last year’s £340m purchase of Opus Energy, an energy retail business serving small and medium-sized businesses. Drax was already in a related area. Then there was the acquisition of four development sites for small-scale gas turbine plants that would cost £80m-£100m a pop to build. Going ahead will depend on winning capacity auctions. | The easy-to-understand part was last year’s £340m purchase of Opus Energy, an energy retail business serving small and medium-sized businesses. Drax was already in a related area. Then there was the acquisition of four development sites for small-scale gas turbine plants that would cost £80m-£100m a pop to build. Going ahead will depend on winning capacity auctions. |
| But that still left question marks over the three remaining coal units. Suddenly Drax is full of ideas, even if it isn’t pushing buttons yet. One more could be switched to biomass using existing subsidy rights. Another could be converted to gas, Drax now says. The process sounds technically challenging but, if it can be done, there could be a saving of between a quarter and a third on the £600m it typically takes to build a 1,600-megawatt gas turbine facility. Add it all up and Drax’s “retooling for a post-coal future” strategy starts to look more than just a slogan. | But that still left question marks over the three remaining coal units. Suddenly Drax is full of ideas, even if it isn’t pushing buttons yet. One more could be switched to biomass using existing subsidy rights. Another could be converted to gas, Drax now says. The process sounds technically challenging but, if it can be done, there could be a saving of between a quarter and a third on the £600m it typically takes to build a 1,600-megawatt gas turbine facility. Add it all up and Drax’s “retooling for a post-coal future” strategy starts to look more than just a slogan. |
| The half-year numbers were wrecked by currency hedges, which are an inevitable part of life when you’re importing pellets (there was a big loss this time, but a bigger gain a year ago). In the round, there was nothing to scare investors. The ambition to achieve annual top-line profits of £425m by 2025 still looks credible. If it’s achieved, Drax still won’t be loved – but it would qualify as one of the trickier turnarounds in the energy sector. | The half-year numbers were wrecked by currency hedges, which are an inevitable part of life when you’re importing pellets (there was a big loss this time, but a bigger gain a year ago). In the round, there was nothing to scare investors. The ambition to achieve annual top-line profits of £425m by 2025 still looks credible. If it’s achieved, Drax still won’t be loved – but it would qualify as one of the trickier turnarounds in the energy sector. |
| Reckitt sale has got some sauce | Reckitt sale has got some sauce |
| Can a condiment be iconic? Reckitt Benckiser is pushing its luck in slapping the label on French’s mustard and Frank’s RedHot sauce. The brands may be well known in the US, but they’re hardly in the Heinz league. | Can a condiment be iconic? Reckitt Benckiser is pushing its luck in slapping the label on French’s mustard and Frank’s RedHot sauce. The brands may be well known in the US, but they’re hardly in the Heinz league. |
| Never mind, Reckitt has been able to persuade somebody of their worth. It is selling its “non-core” – in other words, unwanted – food division for the colossal sum of $4.2bn (£3.2bn), which equates to 20 times earnings and seven times top-line profits last year. That valuation is iconic only of buyers’ bullishness in the late stages of an auction. | Never mind, Reckitt has been able to persuade somebody of their worth. It is selling its “non-core” – in other words, unwanted – food division for the colossal sum of $4.2bn (£3.2bn), which equates to 20 times earnings and seven times top-line profits last year. That valuation is iconic only of buyers’ bullishness in the late stages of an auction. |
| The purchaser is McCormick, the Schwartz spice folk. It congratulated itself on creating “a one-stop shop for condiment, spice and seasoning needs”, but the question is how to find the savings to justify the mighty price tag. Mustards and sauces may have been secondary ventures for detergent-to-condom merchant Reckitt, but it always runs a lean business. | The purchaser is McCormick, the Schwartz spice folk. It congratulated itself on creating “a one-stop shop for condiment, spice and seasoning needs”, but the question is how to find the savings to justify the mighty price tag. Mustards and sauces may have been secondary ventures for detergent-to-condom merchant Reckitt, but it always runs a lean business. |
| Well played Reckitt, which will receive about £1bn more than analysts had expected. Unilever, too, gets credit for dropping out when the bidding became silly. McCormick’s shares fell 5% in early US trading, which speaks for itself. | Well played Reckitt, which will receive about £1bn more than analysts had expected. Unilever, too, gets credit for dropping out when the bidding became silly. McCormick’s shares fell 5% in early US trading, which speaks for itself. |
| BBC | |
| Nils Pratley on finance | |
| Pay | |
| Gender | |
| Race issues | |
| Work & careers | |
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