Thursday 19 January 2017

Thursday, January 19, 2017 Posted by Hari No comments Labels:
Posted by Hari on Thursday, January 19, 2017 with No comments | Labels:

World's largest fund manager demands cuts to executive pay and bonuses
BlackRock is demanding cuts to director pension entitlements and an end to huge pay rises as UK companies prepare to put their latest pay deals to shareholders. In a letter to the bosses of more than 300 UK companies, the US fund manager said it would only approve salary rises for top executives if firms increase workers’ wages by a similar amount. It is a significant intervention from a company which is a shareholder in every business listed on the FTSE 100 index. BlackRock has $5.1tn (£4.2tn) of investments and describes itself as the world’s largest fund manager. The company’s head of investment stewardship in Europe, Amra Balic, said in the letter that a failure to meet the standards outlined by the fund manager would call into question the quality of the board. She said pay must be linked to performance. “Executive pay should be strongly linked to performance, by which we mean strong and sustainable returns over the long-term, as opposed to short-term hikes in share prices,” she said. One of the issues highlighted by BlackRock is the gap between the pay rises handed out to the most senior executives, and those awarded to the rest of the workforce. Blackrock said: “Pay should only be increased each year, if at all, at the same level of the wider employee base, and in line with inflation... In case of a significant pay increase year-on-year that is out of line with the rest of the workforce, BlackRock expects the company to provide a strong supporting rationale.” Excessive boardroom pay has moved up the national agenda since the financial crisis of 2008 and prime minister Theresa May stated an ambition to crackdown on poor corporate governance in the UK. GUARDIAN

NHS England chief hits back at Theresa May on health service funding
The boss of the NHS in England directly contradicted Theresa May’s claims about how much the government is putting into the health service in a defiant performance in front of MPs hours after reports that Downing Street had lost faith in him. Simon Stevens, the chief executive of NHS England, told the public accounts committee that the prime minister’s insistence that the service was getting more money than it asked for was not true and asked why under current plans real-terms spending on health would actually fall in 2018-19. May was “stretching it” by claiming that the NHS was getting more than the minimum £8bn by 2020 it asked for, Stevens added, and he complained that health spending is already much lower than in many other European countries. His evidence came as the winter crisis in the NHS deepened further. At least 23 NHS trusts in England have had to declare a black alert this week alone as hospitals implement extraordinary measures to cope with a surge in demand. Freezing weather expected to imminently affect most of Britain could increase the pressures on already over-stretched hospitals, doctors are warning. At the select committee, Stevens held up a page from the Daily Mail to argue the NHS has fewer medics, beds and scanners per head than other countries in Europe, to contradict the suggestion that NHS spending was in line with the average for OECD countries, which he said included countries such as Mexico. The chief executive also took issue with May’s claim that the government would be giving the NHS an extra £10bn by 2020, and described the cuts to capital expenditure within the health service as “robbing Paul to pay Paul”. GUARDIAN

Dieselgate: UK motorists file class-action suit against VW
Thousands of British motorists have launched a lawsuit against Volkswagen over the “dieselgate” emissions scandal, in a claim that could end up costing the carmaker billions of pounds. The group of 10,000 VW owners has filed a class action lawsuit against the German car firm, seeking £30m, or £3,000 each. If the company had to pay £3,000 to each of the 1.2 million people who own affected cars, including its Škoda, Audi and Seat marques, it would cost about £3.6bn. The German firm has yet to reach a settlement with British and European owners affected by the scandal, in which the company admitted using “defeat devices” to cheat emissions tests, making its cars appears greener than they were. It has not compensated British owners despite reaching a £15bn settlement with 500,000 US drivers, offering instead to fix affected vehicles. The class action suit, which is being led by law firm Harcus Sinclair, is expected to claim that drivers should be compensated because they paid extra for what they thought were clean diesel cars. In fact, Harcus Sinclair alleged in a statement on its website that the cars emitted far higher levels of NOx – a mixture of pollutants nitrogen oxide and nitrogen dioxide – than stated. According to the Department for Environment, Food and Rural Affairs, NOx emissions cause 23,000 premature deaths in the UK each year. The law firm’s application for group litigation, which is free for claimants to join, will be heard in the high court on 30 January. GUARDIAN

U.K. Workers Worse Off Than Pre-Crisis as Generational Gap Opens
Median U.K. household disposable income rose 2.2 percent to 26,332 pounds ($32,000) in the 12 months through March, the Office for National Statistics said in a report on Tuesday. But that gain hides disparities between working households, whose 0.2 percent increase lagged the 3.1 percent enjoyed by retired households. That left the median income for workers 1.2 percent below its pre-crisis value. The report comes after the Institute for Fiscal Studies said British workers are facing the longest period of wage stagnation in at least 70 years as faster inflation and lower productivity eat into pay packets. Some commentators say inequality is rising in the U.K., and it’s been cited as driving the rise of a populist and nationalistic backlash in politics and may have even partly fueled the Brexit vote. The latest ONS data contrasts with the assertion that incomes are diverging, with the figures showing the least well-off households have benefited from a bigger rise over the past decade. The median disposable income for the poorest fifth of households rose by 5.1 percent in the 12 months through March, while it fell 1.9 percent for the richest fifth. Still, perceptions of rising inequality have meant the issue is receiving increasing attention, with Bank of England Governor Mark Carney devoting a speech to it last month. He questioned the view that disparity in incomes was growing, saying the picture was complex, “but in general suggests relatively stable but high levels of overall inequality.” In the governor’s view, made in his last major speech of 2016, “it is no wonder that many question their prospects.” Jeremy Corbyn, the leader of the U.K.’s opposition Labour Party, said on Tuesday he backs introducing a limit on high earnings to prevent inequality increasing in Britain after Brexit. The Adam Smith Institute, a London-based research group, criticized the idea, saying it would prevent the U.K. from attracting the best executives to run its biggest companies. “I would like there to be some kind of high-earnings cap,” Corbyn told BBC Radio 4. “We cannot set ourselves up to be a grossly unequal bargain-basement economy on the shores of Europe.” BLOOMBERG

“Anti-tout” Robbie Williams' company puts his tickets directly on resale sites at higher prices
Tickets on Ticketmaster for seats on level one, block 126 - for Robbie Williams's gig at the Etihad Stadium, Manchester, on Friday 2 June 2017 - were found by the BBC's Victoria Derbyshire programme to be priced at £95, before fees. But on Get Me In, for "platinum" seats on level one, block 125, at the same gig, seats were priced at £160 before fees - £65 more expensive. Because the tickets came straight from the artist's management team, all the profit goes directly to them. But Williams's management, ie:music, has previously called on the government to take stronger action against resale sites. In November 2015, his company signed a petition saying: "We as artist, managers and agents deplore the increasing industrial-scale abuse and insider exploitation of tickets for music, arts and sports events by ticket touts, and their online associates and facilitators." Conservative MP Andrew Bingham, part of the Department for Culture, Media and Sport, said that "somehow, [touts] have worked a way round of abusing this [resale] system". He said it appeared that some artists' management teams were "now also complicit in it as well". In December, the Competition and Marketing Authority announced it was to investigate the resale ticketing market, to ensure sales were complying with consumer rights laws. The BBC’s Victoria Derbyshire programme also found resale websites StubHub, Get Me In and Seatwave were providing specialist software - which could be used by touts - to enable users to sell large volumes of tickets through their platforms. BBC NEWS

Court forces Rolls-Royce to pay £671m bribery settlement
The UK's Serious Fraud Office (SFO) found conspiracy to corrupt or failure to prevent bribery by Rolls-Royce in China, India and other markets. The firm apologised "unreservedly" for the cases spanning nearly 25 years. A UK court ruled the aerospace firm would pay £497m plus costs to the SFO, which conducted its biggest ever investigation into the firm. In one example, in Indonesia, senior Rolls-Royce employees agreed to pay $2.2m and give a Rolls-Royce Silver Spirit car to an intermediary. There was an "inference" that this money was a reward for the intermediary "showing favour" to Rolls-Royce in respect of a contract for Trent 700 engines, used in airplanes, the SFO said. The SFO revealed 12 counts of conspiracy to corrupt or failure to prevent bribery in seven countries - Indonesia, Thailand, India, Russia, Nigeria, China and Malaysia. Rolls-Royce said it would also pay $170m (£141m) to the US Justice Department, and a further $26m (£21.5m) to Brazilian regulators. Described by the judge as "a jewel in the UK's industrial crown", Rolls-Royce makes engines for military and civil planes, as well as for trains, ships, nuclear submarines and power stations. The agreement between the SFO and Rolls-Royce, approved by the court on Tuesday, is known as a deferred prosecution agreement (DPA). It is only the third such agreement that the SFO has struck since they were first introduced into UK law in 2014. They allow organisations to pay huge penalties, but avoid prosecution, if they freely confess to economic crimes such as fraud or bribery. That means there are still questions about whether "justice has been served", said Robert Barrington, executive director at Transparency International UK. "Individuals haven't been held to account and the markets - when the share price has gone up today - are perhaps suggesting this isn't really a punishment or deterrent," Mr Barrington said. The firm's shares finished nearly 4.5% higher on the news of the settlements and the company's announcement that its 2016 profits would beat expectations. BBC NEWS

EE mobile firm fined £2.7m for overcharging customers
The watchdog found that the UK's biggest mobile network broke a billing rule on two occasions. Users who called its 150 customer services number while roaming within the EU were incorrectly charged as if they had called the US. That meant customers were charged £1.20 a minute, rather than 19p. As a result, more than 32,145 customers were overcharged a total of £245,000. Despite calls or texts to the 150 number from within the EU becoming free from 18 November 2015, EE continued to bill more than 7,600 customers until 11 January 2016 who were overcharged £2,203. Lindsey Fussell, Ofcom's consumer group director, told the BBC: "We all rely on big companies to get the most basic things right, and that includes charging the right bills... we uncovered a catalogue of errors." Most customers have been refunded, although EE could not identify at least 6,900 who were more than £60,000 out of pocket. EE has donated about £62,000 to charity in lieu of this sum, but Ofcom has ordered the company to make further attempts to trace and refund every customer who was overcharged. Current and former customers who believe they have been overcharged can contact EE on 0800 956 6000. In October, Ofcom fined Vodafone a record £4.6m for "serious" breaches of consumer protection rules. The regulator found the mobile operator had misled more than 10,000 pay-as-you-go customers, charging them for top-up credit but "providing nothing in return", and had broken the rules on handling customer complaints. BBC NEWS

US accuses Fiat Chrysler of excess diesel emissions
The U.S. Environmental Protection Agency on Thursday accused Fiat Chrysler Automobiles NV of illegally using hidden software to allow excess diesel emissions to go undetected, the result of a probe that stemmed from regulators' investigation of rival Volkswagen AG. FCA shares plummeted as the maximum fine is about $4.6 billion. The EPA action affects 104,000 U.S. trucks and SUVs sold since 2014, about one-sixth the vehicles in the Volkswagen case. The EPA and California Air Resources Board told Fiat Chrysler it believes its undeclared auxiliary emissions control software allowed vehicles to generate excess pollution in violation of the law and each issued notices of violation. Fiat Chrysler Chief Executive Sergio Marchionne angrily rejected the allegations at a hastily-assembled conference call with reporters, saying there was no wrongdoing and the company never attempted to create software to cheat emissions rules by detecting when the vehicle was in test mode. He characterized the dispute as whether the automaker had completely disclosed software that protects the engine, adding the company was planning updated software to address EPA concerns. He said the EPA and the company could have settled the issue in "a more efficient way" without the EPA announcement, and he said "I'm really pissed off" about reports that equate FCA's issues with VW's. He also suggested regulators had a "belligerent" view of automakers. "We don't belong to a class of criminals," he said. "We're not trying to break the bloody law." The company has no plans to stop selling 2016 U.S. diesel models. EPA has reviews ongoing of other automakers' emissions systems, but it is not clear if they have found any additional wrongdoing. Regulators said FCA failed to disclose engine management software in 104,000 U.S. 2014-2016 Jeep Grand Cherokees and Dodge Ram 1500 trucks with 3.0-liter diesel engines. The undisclosed software results in increased emissions of nitrogen oxides (NOx). Cynthia Giles, an EPA official, said Fiat Chrysler had an obligation to disclose the "illegal software" but has not decided whether to label them "defeat devices." The EPA said it found at least eight undisclosed pieces of software that can alter how a vehicle emits air pollution. Fiat Chrysler had recalled vehicles for one of the undisclosed software. By contesting the charge, FCA will push the case into the administration of President-elect Donald Trump. It is not clear how Trump’s EPA will handle this or similar issues. Trump has nominated Oklahoma Attorney General Scott Pruitt, a critic of federal environmental regulation, to lead EPA. Efraim Levy, analyst with CFRA, said FCA stands to "get a fresh start with the Trump administration." REUTERS


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