High street braced for further job losses
January has been yet another a bruising month for the UK high street. Patisserie Valerie, Oddbins and HMV have all fallen into administration over the past few weeks with large numbers of store closures and job losses expected as a result. Meanwhile Tesco has announced major redundancies with 9,000 jobs to go as they close down their in-store fresh food counters. This comes after Carpetright, New Look, Mothercare and Marks & Spencer have also all closed dozens of stores each over the past year in major restructuring programmes – overall more than 1,100 shops were counted to have closed down in the first six months of 2018 alone.
A third of firms considering relocating abroad finds IOD
A survey by the Institute of Directors has found that 35% of firms are considering or actively planning to relocate operations abroad, with 29% reporting that Brexit was the primary cause. Sony and Panasonic have already relocated their European headquarters out of the UK, while Bank of America Merrill Lynch is moving to Paris. Dyson also moved their headquarters to Singapore this month, for what they say were non-Brexit related reasons. Meanwhile, Barclays were given approval this month from the High Court to move assets worth £166bn to their Irish subsidiary because of “continuing uncertainty over … a ‘no deal’ Brexit.” This comes as the Airbus CEO branded the UK government’s handling of Brexit ‘a disgrace’ and warned their operations in the UK may also have to be relocated. The IoD’s interim director general, Edwin Morgan, commented, “We can no more ignore the real consequences of delay and confusion than business leaders can ignore the hard choices that they face in protecting their companies.”
Boards braced for revolt over excessive executive pay
While the first mandatory pay-ratio reports are not due to be published until next year, an investigation by the Mail on Sunday found that bosses at some of the UK’s largest firms are receiving remuneration worth up to 1,000 times more than their average employees. This includes Jeff Fairburn, former boss of Persimmon, who earned £47m – 882 times average worker pay, and Simon Peckham, CEO of Melrose plc, who took home £43m, 1,017 times the average wage for his employees.
Boardrooms meanwhile face the increasing risk of shareholder revolts over such high pay packages as investor activism increases. Advisory service ISS has issued an alert against Virgin Money, Clydesdale and Yorkshire bank owner CYBG, after it was proposed to pay CEO David Duffy a bonus of 118% and long-term incentives worth 177% of his £1million salary, despite the fact that “the company’s share price has declined significantly since the deal was approved.” ISS also advised shareholders to vote down the pay policy and report of mining group Tharisa.