Monthly Archives: May 2012

Lord knows how Spain will get Bankia, its troubled savings bank conglomerate, out of its €19bn mess. But, for once in the crisis that has been unfolding since 2007, anyone can grasp how it happened.

Andrew Hill

As head of the world’s largest advertising group by revenues, WPP’s Sir Martin Sorrell is used to talking about image. His own, which he assiduously promotes through the media, is about to take a battering.

Sorrell – "totally aligned"

ISS, the shareholder advisory firm, has recommended investors at its June 13 annual meeting should vote against WPP’s pay policies, according to which the chief executive will receive total pay and bonuses of £6.8m, up 60 per cent on the previous year.

Nothing new here, you might think. Investors holding more than a third of the stock voted against the remuneration report last year. Sir Martin, one of the longest-serving chief executives of a FTSE 100 company, shrugged that off and probably will again this time. Speaking before the ISS recommendation, he told the UK’s Sunday Times that his interests were “totally aligned with shareholders’. I am a big shareholder – 85 per cent of the package is performance related”. While his base salary had increased from £1m to £1.3m, he pointed out he had had “only one increase in 10 years”. Read more

Now we know what people mean when they say merger integration is torture. Former staff at Autonomy, the UK software company bought by Hewlett-Packard less than a year ago, say submitting to the US company’s “stifling” bureaucratic procedures felt “like being water-boarded”.

Andrew Hill

The return of the “soap opera” with a digital twist – thanks to multi-million pound deals struck by Unilever with Viacom and News Corp – is a further indication that there really is nothing new in marketing.

As I wrote recently, in relation to the spat between BrewDog, a Scottish independent brewer, and the beverage giant Diageo, the tools of communication and promotion may change, but the underlying challenges and responses are the same as they ever wereRead more

Andrew Hill

Investors with long-ish memories will recall that Ariba, the business-to-business ecommerce network that SAP has just agreed to buy, was a dotcom IPO star of 1999: its stock surged 291 per cent on its debut, giving it a market capitalisation of $3.7bn – only just short of the $4.3bn that the German enterprise software company has agreed to pay for it 13 years later. Those were the days, Facebook investors may ruefully reflect.

Ariba had much further to go in the short period before the dotcom bubble deflated in 2000 – at one point it was worth a heady $30bn. But its longevity, before finally being snapped up by one of the companies it successfully challenged, demonstrates the durability of its underlying offering. Ariba’s early potential was obviously hugely overrated at the peak of the internet boom, but it grew into that original valuation. Read more

Dustin Moskovitz, an early employee of Facebook, is worth $5bn, give or take the odd million, after last week’s initial public offering. He could now apply his technological knowhow and abundant new wealth to solving the world’s loftiest organisational problems. Instead, he and his partners are hunkered down in a dark ground-floor office in San Francisco’s Mission district working out how to liberate office workers and middle managers from the tyranny of lengthening to-do lists, overflowing email and meetings about meetings. Dilbert, meet Dustin.

John Gapper

Monday was only the opening day of the trial of Rajat Gupta, the former head of McKinsey and board member of Goldman Sachs, on charges of conspiracy and insider trading. But one thing is already clear: he is not a crowd-pleaser.

Compared with some other recent trials of Wall Street figures, such as Bernie Madoff and Raj Rajaratnam, the turnout was modest. The man that Reed Brodsky, the prosecutor, described as “the ultimate corporate insider” was mainly surrounded by friends and family.

Judge Jed Rakoff’s courtroom on the 14th floor of the court building filled up sufficiently to require some of the press and lawyers to decamp to an 11th floor overflow room (in which the sound quality was abysmal).

In general, however, it felt like a private affair in relation to other landmark Wall Street cases. Given the status of Mr Gupta –  the most senior figure from the US corporate establishment to face charges since the 2008 crisis – that is odd. Read more

Andrew Hill

There were some interesting foretastes of Monday’s deal between Amazon and the big UK bookstore chain Waterstones in comments made by the latter’s managing director, James Daunt, at the FT a few weeks ago.

Mr Daunt – who had previously called the etailer a “ruthless, moneymaking devil” – spoke at a roundtable in early May to launch the Financial Times and Goldman Sachs Business Book of the Year Award. You can listen to a podcast of his initial interview in which he pointed out that all bookshops had to find ways to make the environment for book-buying attractive again. He added:

The largest of us face the additional challenge of how do we become a relevant part of this new digital world, in which, clearly, a substantial part of the reading that our customers engage in is going to take place.

  Read more