Adidas bosses are wondering what to do with the £1 billion of unsold Yeezy-branded trainers and clothing after it ended its partnership with Kanye West, or Ye, following his antisemitic outburst. The sports giant is obviously keen not to be seen profiting from its partnership with the controversial rapper, but given it is facing its first annual losses for over 30 years, writing off £1 billion of unsold stock isn’t a particularly attractive option. The issue is complicated by the fact online retailers report that prices for Yeezy trainers has shot up, with some buyers seeing these discontinued product lines as potential collectors’ items. Giving the stock away for free could also prove controversial, particularly if third-party sellers are then making a huge mark-up on the deal, and destroying trainers hardly seems in line with environmental objectives. Adidas is said to be mulling selling the footwear itself, but ensuring profits are donated to charity.
Well, it’s progress of sorts. It used to be that there were more men called ‘Dave’ running FTSE companies than women. This week to mark International Women’s Day, Morningstar’s James Gard found that women now outnumber CEOs called ‘Dave’ ‘Simon’, ‘Andy’ or ‘Steve’ – but only just. In total there are now seven women running FTSE100 companies, compared to six Simons, six Andrews, five Stephens and four Davids. In more encouraging research, it was revealed that the number of women on company boards has increased significantly, thanks to initiatives like the FTSE Woman Leaders and 30% Club – although it is still a long way short of 50/50. However, as we point out, this increase has been partly due to the large increase in women taking non-executive roles that don’t carry the clout of CEO, CFO or chair. At this rate of progress, it will be many years before women are as likely to be running large companies as their male counterparts – whatever their name is.
Oil Giant Shells Out on CEO Pay
The debate around executive pay has been reignited, with good reason. Shell’s former CEO Ben van Beurden received a pay package of £9.7 million last year – up by 50% (which on the topic of IWD doesn’t exactly help even out gender pay gap stats). A breakdown of his renumeration shows this included a £1.4 million salary, a £2.6 million annual bonus, plus, of course, a £4.9 million long-term share bonus. This brings his total compensation since becoming CEO 9 years ago to £86 million. van Beurden stepped down from the top job at the start of this year, but he will continue to be paid as an adviser to the oil giant and qualify for future performance-based share bonuses. Unsurprisingly, this largesse is being called “indefensible” by groups like the UK Shareholders’ Association as Shell’s bumper profits are in part due to supply issues in the wake of the Ukraine war. Shell’s published reports also stoked further controversy by labelling spending on its forecourt convenience stores as ‘energy transition’, especially as only 17% of its capital expenditure last year was on low-carbon energy, despite previous claims that “energy transition investments” account for a third of its investment.
Scammers Get Smart with AI Bots
Spam emails used to be easier to spot – thanks to the mangled syntax and frequent spelling mistakes. But cybersecurity firms Darktrace has warned that since ChatGPT hit the market, more criminals are using this artificial intelligence tool to create convincing and sophisticated scams. The chatbot is apparently also being deployed by hacktivists to target businesses. Darktrace said that rather than simply including a “malicious link”, these scams have become more targeted and personalised, with a level of “linguistic complexity” designed to elicit trust from the intended target. Turns out GDPR doesn’t stop criminals. Be on your guard.
Retirement Planners are Getting Younger Every Year
It’s not quite the same as getting to vote or buying your first legal drink in a pub, but 18-year-olds will soon have a new rite of passage: being automatically enrolled into their company’s pension scheme. The government is supporting a private member’s bill which will ensure all employees, not just those aged 22 or over, are enrolled into a workplace pension – although they retain the right to opt out. These changes, once they have passed through Parliament, will also mean larger sums going into people’s pension plans with contributions based on total salary, not just those over the ‘lower earnings limit’ – which effectively excluded some lower paid and part-time workers. In other pensions news, the government also announced it was giving consumers an extra four months to effectively ‘top up’ their state pension by buying back missed national insurance payments. As one former pensions minister put it: two good news stories on pensions in a week, is this a government record?
Greggs On a Roll
Sausage roll purveyor Greggs is pushing ahead with plans to open 150 new stores, despite higher food, fuel and labour costs eating into profit margins. The high street favourite already has over 2,300 stores in the UK, and opened 186 new outlets last year. This news comes hot on the heels that Starbucks is also planning to open 100 news outlets in the UK, perhaps indicating that rumours of the death of the high street have been exaggerated. Despite its ambitious plans, Greggs confirmed higher wages and cost inflation “will continue to be a challenge” for the company over the next year. But its chief executive said the retailer’s ‘value proposition’ – City-speak for cheap, filling hot pastries – will remain compelling as customers look to make their money go further.
Cutting Edge Fashion Cuts
The sale of listed fashion business In The Style looks to be more cut price than cutting edge. The Manchester-based fast-fashion business, which used celebrity endorsements to boost sales, listed on stock market two years ago with a market valuation of £105 million. But this rags to riches story has now come full circle, with shares in the company plunging 98% since IPO amid profit warnings and more difficult trading conditions. This week, the company was sold to Baaj Capital, a private business, for just £1.2 million, leaving its shareholders looking more like fashion victims rather than trend-setters.
The Great Regulator Resignation Continues
We hear a lot about recruitment and retention issues across the economy, but it appears regulators aren’t immune to the so-called Great Resignation. At a Parliamentary session this week, it emerged that 650 employees left the Financial Conduct Authority last year, a fifth of its staff, while employee surveys show only a third have confidence in the leadership team. Its current chief executive and chairman Nikhil Rathi and Ashley Alder were being grilled by MPs after the UK-based computer chip designer Arm said the current regulatory regime was a factor in it seeking a listing in New York rather than London. In the session, Rathi said steps had been taken to improve staff retention and morale, however, they didn’t have too many answers about how they could encourage firms like Arm to seek UK listings. The session did however focus on whether more should have been done when Softbank took over Arm in 2016, conveniently before either Rathi or Alder joined the FCA.
Half a Century of Dividend Superheroes
Eight investment companies have all officially raised dividends year in, year out, for over 50 years. These ‘dividend superheroes’, the Association of Investment Companies (AIC) name for these select trusts, is led by City of London, Bankers and Alliance Trust, who have 56 years of dividend rises. To put this in context, they have raising dividends since Sgt Pepper’s Lonely Heart Club Band was the best-selling album of the year. The other investment companies with a 50-plus track record are Caledonia Investments (55 years) The Global Smaller Companies Trust (52 years), F&C Investment Trust (51 years) and Brunner (51 years). According to the AIC, the latest recruit to this half-century club is JPMorgan Claverhouse, which announced its 50th year of increased dividends on 31 January. Income investors might also want to look at the latest Morningstar round up of the FTSE top dividend paying stocks.
Interest Rate Rises Could Be Paused This Month
The newest member of the Bank of England’s monetary policy committee has called for a halt in the relentless rise in interest rates. Swati Dhingra warned this week that ‘overtightening’ monetary policy risks damaging economic output and piling further pressures on already stretched household budgets. Dhingra is known as one of the ‘doves’ on the committee and has voted against previous rate rises. It remains to be seen whether her view will prevail when the Bank next meets on March 23. The MPC will no doubt want to digest the impact of announcements in next week’s budget before deciding whether to impose an 11th consecutive rate rise. Other members of the committee have also been keen to share their views recently with ‘hawk’ Catherine Mann previously calling for continued rate rises to further dampen inflation.
