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BP – Pay Cut or Downward Discretion

I seem to be spending a lot of time talking about pay at companies of late. It would be better if we could concentrate on more important matters, like their strategy, the lack of productivity in UK companies, how they are revising their plans to cope with Brexit and exchange rate changes, and all those other matters that affect shareholder returns. But it seems everyone wants to talk about pay. So here's the latest story. The BP Annual Report has been published ...

Perverse LTIPs and Alliance Trust (ATST)

Voting Your Shares – It’s Important!

The main Annual General Meeting season is now upon us and those investors who hold their shares on the register will have been receiving Annual Reports on paper or electronically. If you hold your shares in a nominee account, some brokers will send you an Annual Report or notify you of when an AGM is coming up. Otherwise you'll need to monitor company announcements. But the key thing is to VOTE YOUR SHARES. You are after all a part owner of the ...

Hard Hitting BEIS Report on Corporate Governance and Pay

The BEIS Commons Select Committee have today published a strongly worded report on Corporate Governance after its recent hearings on the subject. Here are some of the key points they make: They agree with the Prime Minister that high levels of executive pay need to be tackled "for the benefit of society as a whole". They forcefully recommend that Long Term Incentive Plans (LTIPs) should be abolished as soon as possible because they create perverse incentives and are often a way ...

Imagination Technologies – And Why You Should Avoid Such Companies

Imagination Technologies Group (IMG) announced yesterday that Apple, it's largest customer, had notified it that they plan to stop using IMG's technology in future products. Apple represents more than 50% of IMG's revenue and the share price promptly fell by 62%. IMG provides Graphic Processing Units (GPUs) to Apple who have apparently been developing alternative solutions, possibly with the assistance of former IMG employees. IMG suggested that Apple would likely be infringing its patents or other intellectual property so that suggests that ...