M&G chief explodes bombshell in pay debate

Mark Kleinman
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The National Minimum Wage Rises In October
One City grandee has suggested ditching annual bonuses altogether (Source: Getty)

Campaigners against high boardroom pay might balk at the notion of taking advice from a City grandee who landed a package worth £5.4m last year – but Michael McLintock is worth hearing out.

McLintock, chief executive of the £250bn asset manager M&G Investments, has floated an idea whose explosiveness is only exacerbated by his status.

During a private meeting with peers last month, he proposed ditching annual bonuses altogether and replacing long-term share awards with restricted stock that would not be performance-dependent, but would have to be held for a decade.

The catch, so far as those campaigners are concerned? Bosses would need to be compensated with a massive hike in their basic pay to compensate them for all the variable rewards they would be missing out on.

That’s a tough sell, given the level of basic salaries already shelled out – worth scores, or even hundreds, of times the average worker’s pay.

But look beyond that, and McLintock might be on to something. His idea has the advantage of delivering greater transparency, which would help to restrict the level of annual inflation masked by increasingly complex reward schemes.

It would also align executives’ interests more closely with those of long-term investors. Still, moving straight from the existing system to a bonus-free framework in one leap may err on the side of excessive ambition. On that basis, McLintock’s ideas seem unlikely to gain much traction.

M&G has now resigned as a member of the Investment Association, which may technically disqualify it from feeding into the trade association’s review of boardroom pay. That would be a feeble reason for McLintock’s ideas not to receive serious consideration. With some refinement, he might be on to something.


Barclays, G4S, GlaxoSmithKline, Rolls- Royce, Tesco and now British American Tobacco: like a festive waistline, the Serious Fraud Office’s (SFO) in-tray is expanding at a rate of knots. It has been a big week for David Green, the SFO director.

The UK’s first deferred prosecution agreement – with ICBC Standard Bank – was modest in scale, but provides a clear signal that the agency intends to use the powers it was handed last year. Green must now keep up the momentum.

A second plea deal has been promised this month, and it’s important that he delivers it. That’s particularly the case since I understand that a previously stated objective of completing its probe into Tesco’s profit over-statement by the end of the year is now unlikely to be met.

Nevertheless, its funding settlement in last week’s Spending Review appears to have secured the SFO’s immediate future. I would be surprised if Green – whose current term expires in the spring – is not around to tackle that bulging in-tray for a while yet.


So frequent have been announcements about bank capital requirements since the 2008 crisis that it’s hard to believe that the flow will ever stop. But Mark Carney’s pronouncement this week that the

industry’s balance sheets are now close to their optimal safety cushions is about as significant a line in the sand as we have seen. The governor’s confidence is, to a degree, welcome and reassuring – but neither he nor his current colleagues will be around to deal with the next banking meltdown when it hits.

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