Boardroom Pay Up 6% Last Year To £400,000

Non-executive chairmen of top companies received average pay rises of 6% last year, taking their earnings to almost £400,000, a new study has revealed.

Pay analysts Incomes Data Services (IDS) said its research among FTSE firms showed average fees ranged from £270,000 in technology businesses to over £500,000 in oil and gas companies.

Fewer firms increased non-executive directors' pay in 2012 than in the previous year.

Average fees for non-executive directors (NEDs) increased by 4% last year to £64,000 - double the amount of 12 years ago.

Nasreen Rahman, assistant editor at IDS, said: "Investor scrutiny over boardroom pay and the link to shareholder returns continues to be a contentious issue, which could be why fewer Ftse100 businesses raised their fees for NEDs during 2012.

"Executive pay at FTSE 100 businesses is coming under increased scrutiny. That is especially the case in financial services, where the connection between risk and reward is attracting attention not only from shareholders but also from regulators.

"Remuneration committee chairmen have a crucial role to play in improving corporate governance in the wake of the credit crunch. Aligning the interests of the chief executive and shareholders is a particular challenge."

Fees for the chairmen of company remuneration committees increased by 14% last year, said the report.

TUC general secretary, Frances O'Grady, commented: "These figures highlight once again why we need urgent reform of boardroom pay.

"Top directors are showing little restraint while millions of workers are suffering real-term losses to their incomes and are really feeling the squeeze on their living standards.

"FTSE 100 directors' pay rose over seven times faster than average wages in some cases last year, with rises well above inflation.

"These bumper settlements bear little relation to performance. Allowing workers a seat on remuneration committees would help inject a much-needed dose of reality into pay-setting."

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Swiss Voters Reject 'Fat Cat' Pay Deals

Swiss employment groups have reacted bitterly to a referendum that could force firms in the country to rein in executive pay.

Final results showed that 67.9% of those who voted came out in favour of the proposals, which only cover Swiss firms listed on Swiss or foreign stock exchanges.

The draft law, known as the Minder Initiative, was compiled by businessman and senator Thomas Minder who spoke of his delight that it had passed.

"The people have decided to send a strong signal to boards, the Federal Council (Swiss government) and the parliament," he told public broadcaster RTS.

The result was seen as a rejection of a growing wage gulf in the country.

The initiative will limit the mandate of board members to one year and ban certain kinds of compensation, including so-called golden handshakes or golden parachutes given to executives when they leave a company.

In addition, it will ban the bonuses received for takeovers or when a company sells off part of its business.

According to the text, anyone who does not follow the rules could face up to three years behind bars and fines amounting to up to six years of their salary.

Switzerland's main employer's association, Economiesuisse, which had fought against the draft lamented its passage, insisting an "emotional debate" had blocked "a facts-based discussion about the content of the initiative".

Outrage had mounted last month when information leaked out about a planned golden parachute for Daniel Vasella, former head of pharmaceuticals giant Novartis.

Vasella, who made 15 million Swiss francs (£10.3m) in 2011, was to be paid 72 million Swiss francs (£51m) extra over six years, provided he did not go to work for the competition, after stepping down this February.

The deal sparked uproar despite Novartis' subsequent announcement that Vasella would forgo the sum.

The Swiss government and the upper house of parliament had come out against the initiative, cautioning that some large companies might decide to move their headquarters out of the country.

Minder argued that rather than chasing firms away, investors would now be more likely to set up companies in Switzerland.

It is expected that the proposals will be voted on in Parliament in a year's time.

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HSBC Sees Pre-Tax Profit Drop 6% To £13.7bn

HSBC has announced a pre-tax profit of £13.7bn for 2012, down 6% on the previous year.

The figure was below City forecasts of around £15.6bn.

The banking group makes an estimated 90% of its money outside Britain and has benefited from its exposure to emerging markets in Asia.

Chief executive Stuart Gulliver was revealed to have been awarded a bonus of £1.95m.

On Saturday, Sky News City Editor Mark Kleinman reported Mr Gulliver was expected to receive a bonus of just under £2m.

His package of base pay, bonus and long-term share awards reached £6.2m, and with other benefits and pension contributions the package amounts to £7.4m.

His total pay and benefits package - equal to being paid £20,273 each day - compares with £8m a year earlier.

Mr Gulliver's bonus payment will be deferred and subject to possible clawback, while he will not be able to cash it in until he retires from or leaves HSBC.

The company's total bonus pot was £2.4bn, down from £2.8bn in the previous year.

More than 200 staff at the bank will be given pay and bonuses above £1m.

HSBC's Mexican operations were slammed by a US report into money-laundering

This comes despite HSBC having set aside a total of £1.5bn in total to cover the cost of mis-selling of payment protection insurance to UK customers.

It has also made provision to set aside £400 over mis-selling of complex rate swaps to small British businesses.

Last December the bank confirmed it would pay $1.92bn (£1.2bn) to settle a money-laundering probe by US authorities - the largest penalty of its kind ever paid by a bank.

The penalty related to financial transactions suspected of coming from Mexican drug cartels.

At the time of the fine Mr Gulliver said his firm accepted responsibility for its past mistakes.

"The HSBC of today is a fundamentally different organisation from the one that made those mistakes" he said in a statement.

US investigators also focused on the transfer of money on behalf of nations such as Iran.

The bank is listed on stock exchanges in both Hong Kong and London, and is Britain's biggest lender by market capitalisation,

In mid-morning London trading HSBC shares were down more than 2.6%.

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Budweiser Rejects 'Watered Down' Claim In Ads

The maker of Budweiser beer has paid for adverts in a string of American newspapers to deny claims it is watering down its beers.

Anheuser-Busch InBev (AB InBev), the world's biggest brewer, defended itself against the allegations that water had been added to 10 beers just prior to bottling.

The full-page advertisements were published in around a dozen leading newspapers across the United States on Sunday.

The ads featured a picture of a can of drinking water, one of the non-alcoholic drinks sold by the firm below the caption, "They must have tested one of these".

Some beer consumers have filed a proposed class-action lawsuit accusing the company of mislabelling and overstating the actual alcohol content of its beer.

The legal move includes claims by ex-employees of alleged company action to maximise profits by weakening the beers.

The 10 brands in the action include Budweiser, Michelob, Michelob Ultra, Hurricane High Gravity Lager, King Cobra, Busch Ice, Natural Ice, Bud Ice, Bud Light Platinum and Bud Light Lime.

The company has said the lawsuit is groundless.

Lawyers for the beer drinkers have sought production line quality control records, which they say reveal the scale of the alleged action.

AB InBev has around 25% of the world's drink market, and was formed by the acquisition of the American brewer Anheuser-Busch by InBev, which itself was a merger between Belgium's Interbrew and Brazil's AmBev.

In addition to the US beers it also owns global brands such as Stella Artois, Beck's and Corona.

It has 14 brands that each generate more than $1bn (£665m) annually.

The move by the brewer comes as it was revealed UK alcohol consumption dropped 3.3% in 2012.

According to the British Beer and Pub Association, consumption has declined by 16% per head since 2004, with per capita volume of alcohol now below 8 litres annually.

http://news.sky.com/story/1057517/budweiser-rejects-watered-down-lawsuit

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More Horsemeat Found In School Dinners

Minced beef has been removed from all school canteens in Leicestershire after tests showed it contained traces of horse DNA.

In a message to parents, Leicestershire County Council said it was taking "prudent action" but insisted there is "no health risk".

"The vast majority of food we supply is Red Tractor assured and we will continue to regularly seek assurances from our school food suppliers to ensure that they comply with legislation," it said.

"The council only uses food produced within the UK but sought reassurances for two items which aren't processed on site by the supplier."

The second product tested by trading standards officers - a beef grill steak - was found to contain no horse DNA and will continue to be served in school canteens.

Leicestershire County Council supplies meals to 240 schools but has not yet confirmed how many canteens the minced beef was served in.

The product is the latest in a line of items to be removed from sale since the horsemeat scandal erupted in January.

Supermarkets, restaurants and fast food retailers have all been affected, as have pubs, hotels and hospitals.

Last month, Lancashire County Council confirmed that horsemeat was detected in cottage pies it served at 47 schools.

It removed the products from canteens, saying its priority was "to provide absolute assurance that meals contain what the label says".

The Food Standards Agency has tested more than 5,400 products, although only 17 have been found to contain at least 1% horsemeat. None have been found to contain the veterinary drug phenylbutazone, or bute.

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Jimmy Choo Founder Mellon Eyes Global Empire

By Mark Kleinman, City Editor

Tamara Mellon, the founder of the Jimmy Choo fashion empire, is putting the finishing touches to a global chain of upmarket retail outlets as the showcase for a new lifestyle brand.

I understand that Ms Mellon, who quit Jimmy Choo after the upmarket footwear brand's sale to Labelux, a Swiss fashion label collection, has drawn up plans to open flagship stores in the next couple of years in Brazil, Hong Kong, Qatar and Singapore.

These 'showrooms' for her new Tamara Mellon-branded venture will be in addition to others in London, Los Angeles and New York.

Sky News revealed last month that Ms Mellon was raising $25m (£16m) from investors including Michael Spencer, the former Conservative Party treasurer, and Tory Burch, the US-based fashion entrepreneur who is a close friend of Ms Mellon.

The fundraising is understood to have been completed in the last few days and an announcement is expected shortly, according to insiders.

Details of Ms Mellon's plans follow the expiry of a non-compete agreement she signed when she left Jimmy Choo more than a year ago.

The company's sale left her with an £85m fortune but a succession of takeovers of Jimmy Choo during the last decade prompted her to lambast private equity investors for their approach to business.

Among the other new investors in her new venture are David Ross, co-founder of Carphone Warehouse, and Lord Marland, who co-ordinates the Government's Business Ambassadors programme.

Ms Mellon, who lives in New York, is among those who serve as ambassadors for British business during overseas trips.

A spokesman for Ms Mellon, who also sits on the board of Revlon, the cosmetics group, declined to comment.

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Liverpool FC Loses £40.5m In Less Than A Year

Liverpool Football Club has reported a £21.8m increase in its debt, along with a loss of £40.5m.

The overall debt of the club now stands at £87.2m.

A restructuring of its accounting period to align it with the football season means the figures apply to the 10 months between August 1, 2011 to May 31, 2012.

The loss of £40.5m for the 10 months period was, however, less than £49.3m the previous year.

The accounts show that although commercial revenue increased, so did the club's overall liabilities.

However, managing director Ian Ayre played down the significance of a rise in debt levels.

"It's definitely not something I believe anyone should be worried or concerned about. It is seasonal - our debt goes up and down," he told the Liverpool Echo.

"We have money to pay out and money coming in, just like any business.

"The difference in football is some of the swings are significant, so if you look at player trading, we may need to make investments as we do in the summer before our key revenues come in: big sponsorships cheques, big ticket revenues, all the media revenues etc.

"You come to Christmas when you maybe have less revenue coming in but you have got money that needs to go out, both on playing deals that you are doing at the time but also on historic player deals."

Mr Ayre added: "We need to continue to improve our squad and what a lot of people won't relate to perhaps is that when you are improving your squad and making that investment, you have knock-on costs that will create debt in the short term.

"We will continue to invest in the squad - I think that is what our fans would expect.

"But the most important thing is that we do it prudently and in a sustainable way that is affordable."

Contributing factors to the increase in debt were player instalment payments plus exceptional payments of just over £9.5m - relating to matters such as the stadium project, general restructuring and pay-offs to senior employees who left the club.

The 2013 Deloitte Football Money League, which is ranked on position and revenue in 2011-2012, listed Liverpool in ninth position.

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Funding For Lending Credit Cut Sharply

British lenders taking part in a Bank of England scheme to boost firms' and households' access to credit cut lending sharply in the last three months, official statistics have revealed.

The lower than expected Funding for Lending Scheme (FLS) figures have dampened hopes that the project could help revive economic growth.

The BoE announced the scheme jointly with the Government in June 2012, as a way to unblock a credit log-jam which some economists say is a big factor behind Britain's weak economic recovery.

Banks and building societies cut lending by a net £2.425bn between October and December.

The figure compares to an increase of around £1bn in the first months of the FLS's operation.

Total net lending by banks and building societies taking part in the scheme - which includes all major British lenders apart from HSBC - is now down by £1.502bn since June 30.

The bank said that the scheme's benefits will not be fully clear until later in 2013.

"I would not expect to see a return to rising aggregate quantities until we start getting data for 2013 at the earliest," the bank's Paul Fisher said.

Taxpayer-backed lenders Royal Bank of Scotland and Lloyds Banking Group saw lending fall, despite drawing money from the scheme.

Lloyds has drawn £3bn so far, but lending fell by £3.1bn last quarter, while RBS has taken £750m, but its lending still fell by £1.7bn.

Prime Minister David Cameron's official spokesman said that the Government and the BoE had always made clear that it would take some time before the impact of the Funding for Lending scheme was felt, and that it was not expected as early as the fourth quarter of 2012.

"I think the Bank of England at the time of the launch of the policy was clear that it would take some time for the impact of the policy to be fully felt," the spokesman said.

"The most recent figures for lending in the economy, for January - the first month of Q1 2013 (the first quarter of 2013) - show that lending to the economy increased in January.

"I think we are also seeing the impact of the Funding for Lending scheme through lower borrowing costs. I think we are seeing evidence of the policy having a clear impact."

But shadow chancellor Ed Balls said: "These are deeply disappointing figures. Net lending is actually down since the Funding for Lending scheme started and down by £2.4bn in the final three months of 2012.

"And the Bank of England's own figures show that net lending to businesses fell by £4.5bn in the last quarter."

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Tory MP Tells Osborne: 'It's Time To Man Up'

By Joey Jones, Deputy Political Editor

Chancellor George Osborne has been warned by a Tory MP that he must "man up" and recognise the scale of the deficit challenge facing Britain.

Less than three weeks before the Budget, Conservatives told a meeting of the right-wing Institute for Economic Affairs (IEA) that borrowing is at worrying levels.

Kwasi Kwarteng, the MP for Spelthorne in Surrey who chairs the Tory backbench "Free Enterprise Group", struck a particularly pessimistic tone.

Arguing that the international aid budget should not be exempt from cuts, he told the audience: "We are still borrowing £120bn. We are not in a fit state to be spending money in this way."

Looking to the future, he added: "We have got to address this, and if we don't, what will happen is that we will have another government which will probably not address it and we will end up being a basket case.

"I'm quite happy to say that publicly. This is a big, big problem, and unless we can actually man up and deal with it, I think we've got big problems ahead of us."

He was not the only gloomy Tory at the event.

Ben Gummer, the MP for Ipswich, said the lack of a credible medium or long-term budgeting framework meant the Government was unable to get a grip on the fiscal situation.

He suggested last week's Eastleigh by-election result, which saw the Tories pushed into third behind UKIP, showed the public "lack confidence in our abilities as politicians to meet big challenges".

Other MPs suggested no department should be protected from possible cuts in the current spending review, which is looking at 2015-16 and should be concluded in the first half of this year.

Therese Coffey and David Rutley, who are both members of the Government at parliamentary private secretary level, and ex-whip Brooks Newmark suggested the ring-fence that is applied to health, schools and international aid was no longer sustainable.

"No budget should be sacrosanct," Ms Coffey said.

Mr Newmark added that the NHS was "incredibly bloated" and argued the huge costs of the health service could be tackled without affecting patients.

The MPs' comments come as Mr Osborne is under intense pressure ahead of his crucial Budget on March 20 and amid wider party concerns sparked by the Eastleigh defeat.

None of the participants in the IEA debate thought it was likely that the ring fences would be touched by the Government.

But the tenor of the argument showed there is considerable frustration on Conservative backbenches that the Government is making the job of deficit reduction unnecessarily hard for itself.

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Austerity? World Now Has 1,426 Billionaires

The world now has a record 1,426 billionaires with a combined wealth of $5.4 trillion (£3.6trn), according to a new survey.

The 2013 Forbes annual billionaires issue said a total of 210 new billionaires have been added to the list, with their wealth up $800bn (£530bn) on the previous year.

Mexico's telecoms entrepreneur Carlos Slim continued to top the list with a net worth of $73bn, up $4bn in the previous 12 months.

Zara fashion chain boss Amancio Ortega moved up two spots to number three, with a net worth of $57bn, to sit behind Microsoft founder Bill Gates.

The surprise shift was for veteran American investor Warren Buffett, who dropped from second to fourth place with $53.5bn - even though he increased wealth by $9.5bn in the year.

It  was the first time since 2000 that Mr Buffett failed to make the top three in the list.

The 1,426 billionaires have an average wealth of $3.8bn, up $100m on the 2012 list.

The US continues to lead with 442 billionaires, followed by 386 in the Asia-Pacific region.

In 2012 the top three were Carlos Slim, Bill Gates and Warren Buffett

There are 366 ultra-rich on the list in Europe, with 129 in The Americas and 103 in the Middle East and Africa.

Forbes said here was a 32% increase in the number of female billionaires, with 138 now on the list.

The richest woman in the world, worth an estimated worth of $30bn, is Liliane Bettencourt - whose father foundered cosmetics giant L'Oreal.

Italian fashion head Miuccia Prada ranks 79 on the list with $12.4bn, just slightly behind Facebook founder Mark Zuckerberg's $13.3bn position at 66.

Britain's richest man, the Duke of Westminster, is listed as the 89th richest person with $11.4bn.

Sir Richard Branson is ranked 272 on the list with $4.6bn - behind Topshop's Sir Philip Green at 248 with $5bn.

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