Welcome back, particularly if you’re a FTSE 100 boss. Monday marks the day by which chief executives of the UK’s top 100 listed companies have made the same amount of money as the average full-time employee does in a year.
The good and bad news for executives is the gulf between their pay and that of their lackeys is narrowing, according to a report by the High Pay Centre and CIPD, the HR development body. Bad, because if the Smith & Nephew pay row last year is anything to go by, some of Britain’s bosses reckon they’re underpaid, at least compared to their Stateside rivals. Good, because politicians and your average person on the street are unlikely to agree with that assessment — and as companies brace for a fresh barrage of criticism this year as it becomes mandatory to report executive pay ratios for the first time, at least they can say the gap is heading in the right direction.
Still, the gap between boss and those on the office floor is sizeable. In 2018, FTSE 100 CEOs were paid 117 times the average UK worker, compared to 133 times the previous year. The average boss was paid £3.5m; the average full-time worker £29,559. The gap will have to narrow a lot further before investors give up pushing executives on pay.
This week will be brimming with Christmas sales updates from the UK’s retailers. On Monday there is privately-owned Aldi, which reports a 7.9 per cent year-on-year increase in UK sales in the four weeks to December 24th, ringing up £1bn in sales. That was slower growth than in previous years, though, and reflects the increase in the number of Aldi stores — the retailer does not publish a like-for-like sales figure.
Plus500, the online trading group, said it expected to report full-year revenue of $354m and earnings before nasties of around $190m after a “much improved second half” of the year. That still represents a fall of around 50 per cent in revenues from 2018, before rules limiting leverage were introduced in Europe, and a 60 per cent drop in earnings. But at its half-year results in August, revenues were down almost 70 per cent year-on-year and earnings were 80 per cent lower.
KPMG faces a testing 2020, our accountancy correspondent explains. Boss Bill Michael was voted in as a “wartime leader” to turn around the laggard of the Big Four in 2017. But as one of his partners puts it: “no one realised quite how big the war would turn out to be”. This full analysis of KPMG’s woes and the battles Mr Michael must win is well worth a read.
Finally, from another industry with enough of its own woes: new car sales data are also out this Monday. UK new car registrations sank to a six-year low in 2019, with political uncertainty and confusion over emissions regulations the prime candidates for blame. Sales were down 2.3 per cent from the year before, the third consecutive annual decline and the lowest level since 2013.
The world’s largest caterer has begun the search for a new chairman, as Paul Walsh prepares to step down after six years at Compass Group. The FTSE 100 group has announced that Mr Walsh, the former Diageo chief executive who also serves on the boards of delivery company FedEx and US fast food group McDonald’s, will leave Compass once his successor has been found. Mr Walsh is leaving to focus on his other business interests.
Beyond the Square Mile
Mercedes-Benz owner Daimler will recall nearly 745,000 of its 2001-11 vehicles in the US because of concerns that their sunroofs may be unsafe. The German carmaker said Mercedes-Benz cars from its C-Class, CLK-Class, CLS-Class and E-Class lines would be recalled because the bonding between the glass panel and the sliding roof frame might not meet requirements and could mean roofs detach. The recall is expected to begin on February 14.
European savers will soon be offered their first opportunity to invest in an exchange traded fund focused on the fast-growing legal marijuana industry. Canadian fund group Purpose Investments plans to launch the Medical Cannabis and Wellness ETF from January 13. Read more
Before CES, the world’s biggest technology event, even begins this week in Las Vegas organisers are facing criticism for inviting Ivanka Trump to speak. Meanwhile, the 170,000 visitors to the show are expected to see the latest products, both serious and silly, from 4,500 companies in fields as diverse as the internet of things, 5G and augmented reality.
Closing quote — essential comment before you go
Work & Careers
As the pace of digital transformation in the workplace accelerates, the next decade will pose challenges for all employees. Here are the five essential skills that workers will need to navigate a changing work environment.
Think of globalisation and you think of HSBC. Yet in the latest reported period the bank made about 80 per cent of its profits in Hong Kong and mainland China and that is starting to look like a vulnerability. Read the full column.
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