PRESS DIGEST – British business – April 25

Sunday April 25 2010

The Mail on Sunday

ALLIANCE TRUST CHIEF GETS BIG PAY RISE

The chief executive of investment company Alliance Trust
(ATST.L: ), Katherine Garrett-Cox, has received a 10 percent
increase in her remuneration package since last year, despite
Alliance’s relatively low performance. Its asset value grew by
22 percent in the year to January, compared to the average
increase of globally invested trusts hitting 29 percent. This
performance has been ascribed to Alliance missing the beginning
of the stock market rally at the beginning of 2009. Alliance is
said to be refocusing on emerging markets in response to
political and economic uncertainty in the UK.

LLOYDS’ ONE BILLION POUND PROFIT FROM PENSION CUTS

Lloyds Banking Group (LLOY.L: ) is this year expected to
receive a 1 billion pound ($1.55 billion) boost to profits,
stemming from a cap it has imposed on rises of the pensionable
salary of its staff. The saving is expected to play a
significant part in returning Lloyds to profit this year, and
increases the likelihood that the government will choose to sell
its 41 percent stake in the bank in the near future. Lloyds has
come under fire for its remuneration packages, with the
Association of British Insurers having recently issued an alert
on the its directors’ pay.

Sunday Times

ITV EYES TAKEOVER OF RIVAL FIVE

Broadcaster ITV (ITV.L: ) is considering an acquisition of its
rival Five as part of new chief executive Adam Crozier’s
expansion plans. Crozier plans to start making takeovers as soon
as possible, before the general consolidation in the sector that
he believes will come due to the gradual decline of advertising
on television. Advertisers, however, may not be keen on the
proposal, as a deal would give ITV a total share in the
television advertising market of 53 percent.

SWANN’S EIGHT MILLION POUND NEST EGG

The chief executive of WH Smith (SMWH.L: ), Kate Swann, could
receive eight million pounds in pay over the next three years as
part of a new contract offered to her by the retailer. WH Smith
will consult with shareholders on the remuneration package over
the next few weeks. It is hoped that the lucrative pay deal will
stop Swann, who has quadrupled the chain’s profits since taking
over in 2003, from being lured away to other jobs.

PUT UP OR SHUT UP, INSIST FORTH PORTS

A consortium bidding for the port owner Forth Ports (FPT.L: )
are expected to abandon their attempts at a takeover, after the
company asked the Takeover Panel to issue a “put up or shut up”
deadline. The consortium, which already holds 27.4 percent of
the shares, have been attempting to persuade other investors of
the benefits of a takeover, but were told that their plan would
only gain the necessary support if the bid was increased to 685
million pounds, or 15 pounds per share.

SHAREWATCH

Taylor Wimpey (TW.L: ) (Still looks like it has more to
deliver)

The Sunday Telegraph

RBS BOWS TO FURY AT BONUSES

State-controlled Royal Bank of Scotland (RBS.L: ) will this
week reform its controversial executive pay scheme. Chairman Sir
Philip Hampton will effectively admit at the bank’s annual
meeting on Wednesday that the share price target element of the
scheme should have been set higher. Shareholders wrote to City
Minister Lord Myners to convey their opposition to the bank’s
long-term incentive plan. The plan covers bonuses for the next
three to five years and is triggered when RBS’ share price hits
50 pence. Shares closed at 55.8 pence Friday.

BARCLAYS SET TO ANNOUNCE TWO BILLION POUND PROFITS

Barclays (BARC.L: ) is expected on Friday to announce
first-quarter profit (Read more your timing to make a profit.)s of two billion pounds, continuing a record
run of results. Analysts estimate that Barclays’ investment unit
Barclays Capital accounted for almost three-quarters of profits
over the quarter. Credit market write-downs are expected to be
substantially lower than those seen in 2009, with financial
markets having stabilised. The performance is likely to deflect
potential protest over executive pay, with activist investor
Pirc having advised shareholders to vote down “excessive” pay
awards.

INSURERS ATTACK IMF LEVY ON FINANCIAL SECTOR

Insurance industry heads said that the imposition of a tax
on the financial sector as proposed by the International
Monetary Fund would be “absurd” and “unfair” to insurance firms
that have not benefited from taxpayer support. Legal & General
(LGEN.L: ) chief executive Tim Breedon, Lloyd’s of London chairman
Lord Levene and Aviva (AV.L: ) chief executive Andrew Moss all
spoke against the tax. Moss said: “It’s like being fined for
speeding when you’ve never been behind the wheel.” The insurance
sector employs around 25 percent of UK financial services
workers.

REJECT XSTRATA CHIEF’S PAY DEAL, SAYS MANIFEST

Manifest, the proxy voting agency, has called for its
members to vote against the expected 6.7 million pound package
awarded to Mick Davis, chief executive of miner Xstrata (XTA.L: ).
Manifest also criticised majority shareholder Glencore
International, which holds 34 percent of the group’s voting
rights. Manifest said: “At last year’s AGM, without the support
of Glencore . the resolution would have received less than 50
percent support. However, with the remuneration committee being
chaired by Xstrata’s and Glencore’s chairman, support from the
majority shareholder is a given.”

AVIVA LETS SHAREHOLDERS VOTE ON ETHICAL POLICY

Insurer Aviva (AV.L: ) will this week put its ethical policy
to a shareholder vote, becoming the first company in Britain to
do so. The company’s corporate responsibility report will face a
shareholder vote at its AGM on Wednesday. Shareholders wishing
to express their disagreement with the ethical or social policy
of a company have until now been able to do so only by voting
against the company’s reports and accounts. Chairman Lord
Sharman said: “One adage has it that the creed accountants live
by is ‘what gets measured gets done’. If you have a
responsibility, you need to report your progress against that.”

ASTRA BANKS ON EMERGING MARKETS SALES

The pharmaceutical giant AstraZeneca (AZN.L: ) hopes to reveal
impressive sales in emerging markets when it releases its
first-quarter results next Thursday. Slowing drug sales in the
West mean that markets such as China, India and Brazil are the
primary target of AstraZeneca. The company is aiming for a
double-digit increase in emerging economies sales, with much of
this growth coming from sales of branded generics, cheap
off-patent products sold abroad in high volumes.

SUNDAY QUESTOR

Ashtead (AHT.L: ) (Buy)

ARM Holdings (ARM.L: ) (Sell)

PRESS DIGEST – British business – April 25