What just happened
Long stories short
- Protests spread across Iran over water shortages as the country feels the effects of its worst drought in half a century.
- A fraud trial implicating Cardinal Angelo Bacciu, a former close aide to Pope Francis, began in Rome.
- The White House said a ban on travel to the US for most Europeans would remain in place for now.
Pandemic pay hikes
Four in ten FTSE 100 CEOs have had pay rises during the pandemic, Tortoise has found. That means six in ten haven’t, but some of the raises are big (£5.5 million for the head of one betting firm), and some of those who’ve taken a cut still earn hundreds of times more than their average workers.
Plus ça change? Exactly, but the optics are different in a pandemic, and shareholders aren’t all happy. For many people, the past year has been one of great financial stress. Every pound, dollar or yuan has had to be counted. What’s clear is that for a smaller but significant number, even far from the booming tech sector, the reverse has been true.
The median CEO was paid £2.6 million in the most recently reported year, a £500k (or 16 per cent) decline from the previous year.
Tim Steiner of the online grocery store Ocado, who in 2019 was the UK’s highest paid CEO, saw his pay fall furthest. He received £6.9 million during the year ending March 2021, down from £59 million the year before.
Some of this apparent restraint has been driven by shareholders, who have increasingly come out against big pay rises at a time of rising inequality. Major investors – such as Fidelity, Legal and General, Railpen, and Schroders – have explicitly asked companies not to put executives ahead of the rest of the workforce.
But the message hasn’t got through to all companies. Here are the 38 companies that awarded larger pay packets to their CEOs after the pandemic began:
The largest increase in absolute terms went to Peter Jackson, CEO of the sports betting firm Flutter Entertainment. His pay rose from £2 million to £7.5 million or 258 per cent, surpassed in percentage terms only by the CEOs of Smith & Nephew (538 per cent) and Reckitt (421 per cent).
Overall, 16 of these pay rises were worth over 50 per cent more than the previous year’s total. Other findings include:
- The highest-paid FTSE 100 CEO, on £15.4 million, is Pascal Soriot of AstraZeneca, the company behind the Covid vaccine. This was a 0.9 per cent increase on the previous year.
- Even when we looked at just base salaries, some large increases were evident. The biggest in absolute terms were Prudential, at £240,000 and Flutter Entertainment, at £103,000.
- Eight of the 39 companies that released data for the periods up to or since June 2020 – Admiral Group, British Land, Imperial Brands, Kingfisher, Land Securities, Mondi, Phoenix Group, and Standard Life Aberdeen – had a change in CEO during these periods, with higher pay packages for the new CEOs.
Some CEOs have been rewarded after strong company performance. Simon Arora, CEO of the bargain retailer B&M, which saw bumper sales during the pandemic, is an example: his package grew by 198 per cent, from £1.2 million to £3.6 million.
But some of these raises have been awarded in the face of strong shareholder opposition. For example, 62 per cent of shareholders rejected Rio Tinto’s pay plan at the Australian mining company’s annual meeting in May, following the controversial destruction of an ancient Aboriginal site last year – though the vote was not binding. Similarly, shareholders recently voted out the director tasked with remuneration at JD Sports.
All of this increases the focus on the gap between executives and the rest of their workforces. Since 2019, publicly listed companies have been obliged to publish the ratio between CEO pay and average staff pay. Tim Steiner tops this chart: despite his pay cut he still earns 312 times more than the average worker at Ocado.
Over the past year this ratio has increased for companies in our graphic: by 124 and 109 per cent, respectively, for B&M and Flutter Entertainment. But it is worth noting that the same goes for companies not included in the graphic: BHP, Hargreaves Lansdown and National Grid plc didn’t give pay rises to their CEOs, but the gaps between CEO pay and average staff pay still increased year on year.
Tortoise tracks CEO pay against the median UK wage as part of our Responsibility100 Index, a ranking of FTSE 100 companies according to their social and environmental performance that we produce in partnership with Teneo. The next update of the R100 will be released in October.
Belonging identity, society, beliefs, countries
A posse of Russia’s richest men, plus Russia’s national oil company, go to court in London tomorrow to try to muzzle Catherine Belton, a former Moscow Times and FT correspondent and author of Putin’s People, one of the best books yet on… Putin’s people. Roman Abramovich, owner of Chelsea, objects to the suggestion that he bought the club on Putin’s instructions. Mikhail Fridman and Petr Aven, billionaire bankers, are suing for defamation and on data protection grounds respectively. Belton’s publisher, Harper Collins, is standing behind her and as part of planet Murdoch has some legal and financial muscle. It will come in handy. The law firms acting for the claimants, including Carter-Ruck and Harbottle & Lewis, take themselves extremely seriously.
Without prejudging anything, let’s just say this: it is horribly difficult to get at the truth of what Russia’s oligarchs do, how they make their money and how much of it involves mutual back-scratching with the Kremlin. Belton is exceptionally brave to try, and the legal minds that decide her case may want to bear in mind the words of a former Russian foreign intelligence (SVR) colonel who served a stint in New York, and whom she quotes: “I want to warn Americans. As a people, you are very naive about Russia and its intentions. You believe because the Soviet Union no longer exists, Russia is now your friend. It isn’t, and I can show you how the SVR is trying to destroy the US even today and even more than the KGB did during the Cold War.” The UK isn’t the US. But still.
New things technology, science, engineering
For his next trick Jeff Bezos wants to go to the moon. That is to say, he wants to reopen a contract negotiation in which he lost out to Elon Musk’s SpaceX to provide Nasa with its next moon lander. Musk’s proposal was for a rocket that looks for all the world like the one in Tintin on the Moon. Bezos’s is for something much more like the Eagle in which Armstrong and Aldrin landed all those years ago. Fired up by his recent 11-minute lunge into space (though not orbit) he says he’s willing to waive payments worth up to $2 billion to get back in the bidding. And he knows this might be helpful because Nasa has a $2 billion hole in its back-to-the-moon budget. $2 billion could pay for about 930 million AstraZeneca Covid vaccine doses.
The 100-year life health, education, living, public poliCY
UK Covid case numbers have fallen for the sixth day in a row, boosting hopes that the pandemic could finally be receding into the rear view mirror, at least within these intensively and expensively vaccinated shores. “We’re not completely out of the woods, but the equation has fundamentally changed,” Professor Neil Ferguson told the BBC this morning. He said that by September or October “we’ll be looking back at most of the pandemic”. This is the Neil Ferguson who recently warned daily case numbers could go over 100,000 and even to 200,000. He said he’d be “quite happy to be wrong if it’s wrong in the right direction”. No one quite knows why numbers are falling, but factors could include good weather, school holidays and a spike around the time of the Euros that immunised a lot of young people, particularly men. The key question is whether hospitalisations follow case numbers down in the next few weeks.
Our planet environment, natural resources, geopolitics
Oil in Brazil
Western oil majors are cutting back on big new oil and gas projects where environmental watchdogs and regulators are paying close attention, but not off the coast of Brazil. There, Bolsonaro is all for drilling and the number of offshore wildcat rigs looking for new reserves will quadruple this year, to 19. “It’s almost like the last hurrah,” a US energy consultant tells Bloomberg Green. It’s also an attempt to recoup investments in exploration off Brazil that were shelved last year as the world went into lockdown. Total, Equinor and Shell are all involved, despite extravagantly promoted plans to cut back on fossil fuel extraction. This is, one supposes, all about funding the transition.
Wealth investment, fairness, prosperity
Barrack’s big idea
Tom Barrack is the 74-year-old Lebanese-American private equity tycoon who backed Trump early in his presidential bid and is now facing charges in the US of acting as an illegal agent of a foreign country, in this case the UAE. That much alert Tortoise members may already know. Less widely known, perhaps, until this morning’s must-read writethru (£) in the FT, is that he was trying to buy part of Westinghouse, the US nuclear reactor maker, in order to be in a position to sell reactors to the Gulf. Not only that, he also pitched the transaction to Steve Bannon, Trump’s erstwhile White House advisor, as the perfect antidote to the negative publicity the new president was getting for the travel ban he imposed early in his administration on visitors from seven mainly Muslim countries (not including the UAE). It would “balance the current noise,” Barrack suggested. The deal didn’t fly. Barrack says he’s going to clear his name.
Emily Benn’s Olympic fact of the day
This morning in Tokyo, Team GB’s Tom Dean and Duncan Scott won Britain’s first 1-2 finish in a swimming event since 1908, when GB actually managed that feat twice in the pool, in both the men’s 1500m freestyle and 200m breaststroke. Team GB have not won the 1500m freestyle since, but in Montreal 1976 David Wilkie famously won gold in the 200m breaststroke (something no GB man has done since). The last time Team GB achieved a 1-2 in any event? Well, Team GB managed it twice in Rio 2016: Max Whitlock and Louis Smith in the pommel horse, and the Brownlee brothers in the triathlon.
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Photographs by Getty Images
How Nicki took over politics
It’s easy to laugh at the rapper’s strange outbursts, but precedents set by Elvis Presley and Donald Trump suggest that swollen testicles are a problem for all of us