PRESS DIGEST – British business – April 6

The Times

AIRLINE CHIEFS SHARE THREE MILLION POUND OPTIONS

Seven British Airways (BAY.L: ) executives were awarded share
options with a combined value of almost three million pounds
last month as cabin crew staged two four-day strikes. The awards
were for shares worth 2.50 pounds each and the executives will
be allowed to exercise their options only if performance targets
are met. Chief financial officer Keith Williams was the most
highly rewarded director, being awarded share options worth
812,807 pounds on top of his 440,000 pound basic salary.

FINANCIAL MARKETING AND PR BUCK TREND AS NEW JOBS DECLINE

Demand for new workers fell last month, according to
Reed.co.uk, Britain’s largest recruitment website. Reed’s job
index fell from 105 to 102 in March, leading to concerns over a
rise in unemployment. However, Reed said that demand for
qualified accountants and strategic consultants is now at its
highest level since the index started last year. Unemployment
has been stable in recent months, at around 2.45 million, but
economists have warned that the figure could peak at 2.8 million
this year.

LAST MINUTE RUSH TO PAY BONUSES

Many companies have brought forward the payment of bonuses
and dividends in order to protect employees and shareholders
from the 50 percent tax rate, which takes effect from April 6.
FTSE 100 firms including supermarket groups Tesco (TSCO.L: ) and J
Sainsbury (SBRY.L: ) have brought forward bonus payments while the
miner Rio Tinto (RIO.L: ) and property group Hammerson (HMSO.L: )
were among the companies that ensured dividend payments beat the
introduction of the new tax rate. Matt Ellis, a partner at
professional services firm Deloitte, said: “As we approached
April 5, more and more companies looked at the last minute to
see what they could do.”

The Daily Telegraph

LADBROKES BOSS RETAINS HOLDING IN BETTING RIVAL

The betting company Ladbrokes (LAD.L: ) has permitted its new
chief executive to keep a stake in Sporting Index, a smaller
spread-betting firm. The company’s decision to let Richard Glynn
maintain his stake appears particularly strange to observers in
the City, as Ladbrokes has already bought Glynn out of 1.75
million pounds worth of other business interests whilst seeming
to ignore the potential conflict of interest. Although Sporting
Index and Ladbrokes are not in direct competition, Sporting
Index takes bets on some of Ladbrokes’ most lucrative markets
such as horse racing and football.

SOCA ENLISTS BOARDROOMS TO FIGHT BUSINESS-FOCUSED CRIME

The director of intervention at the Serious Organised Crime
Agency has claimed that the agency has developed a network of
over 1,500 boardroom “contacts” to prevent legitimate businesses
being infiltrated by organised crime. Paul Evans explained that
the growth of its information network was an important means by
which companies can defend themselves against criminal gangs.
SOCA has become better known in the business world in recent
weeks with its support of Financial Services Authority-led raids
on insider dealing rings.

QUESTOR

JPMorgan Russian Securities (Buy)

BAE Systems (BAES.L: ) (Buy)

Ashtead (AHT.L: ) (Buy)

Salamander Energy (SMDR.L: ) (Buy)

BHP Billiton (BLT.L: ) (Buy)

Drax (DRX.L: ) (Buy)

The Independent

CBI CALLS FOR REFORM OF PUBLIC SECTOR PENSIONS

The Confederation of British Industry has urged the gradual
closure of generous final-salary pension schemes in the public
sector and an enquiry into the future viability of public sector
pensions in light of increasing life expectancy. The CBI does
not go so far as to recommend the money purchase schemes common
in the private sector, but recommends that new employees receive
nominal defined contribution schemes, whereby the public sector
workforce contributes to a non-invested fund partially
subsidised by the government.

BROWN SAYS THAT AGREEMENT ON GLOBAL BANK TAX IS CLOSE

The Prime Minister has stated that progress is being made in
the formulation of a global banking tax designed to halt
reckless risk-taking in the financial services sector. However,
agreement on the new tax is unlikely to be reached before the
next G20 summit in Toronto in June — after the general election
which the Labour government is expected to lose. The
Conservatives and Liberal Democrats, however, have both made
pledges to impose their own taxes on bank profits should they
win the election.

The Guardian

UNILEVER CHIEF LAMBASTS SHORT-TERM CITY MENTALITY

The chief executive of Anglo-Dutch conglomerate Unilever
(ULVR.L: ), Paul Polman, has criticised UK companies for focusing
on short-term results and adding shareholder value. Polman said:
“I’m not driven and I don’t drive this business model by driving
shareholder value.” Polman described achieving short-term
results as “easy”. Unilever is said to be considering the sale
of its Findus business in Italy which could raise up to 700
million pounds. His comments follow those of Richard Lambert,
the director-general of trade body the Confederation of British
Industry, who recently made similar claims that companies are
too focused on short-term results.

SENIOR BARCLAYS OFFICIAL CASHES IN NINE MILLION POUND SHARES

Rich Ricci, a senior official at Barclays Capital — the
investment banking division of British bank Barclays (BARC.L: ) —
sold 2.5 million shares valued at nearly nine million pounds at
the end of March. The figures have been disclosed by the bank
because Ricci, as a member of Barclays’ executive committee, is
a “person discharging managerial responsibility”. Ricci is said
to have received approximately 5.4 million shares in
compensation in the middle of March. He is one of ten directors
to have received shares worth a combined total of 64 million
pounds this year as part of a five-year performance-pay deal.

‘CAPACITY CRUNCH’ THREATENS MOBILE PHONE WEB NETWORK

The calling of a general election this month could
potentially threaten government plans to liberalise UK airwaves
and delay the sale of the old analogue television broadcast
spectrum. The delay could prevent mobile network operators from
expanding their capacity for data traffic and possibly render
useless the increasing number of smartphones in the UK. The
newly merged mobile networks Orange and T-Mobile would be left
unsure if they could use their current spectra for
next-generation mobile data traffic. Last year Ofcom announced
that traffic had increased by 200 percent and that networks were
struggling to cope under the strain.

CONSERVATIVES SEEK TO DILUTE BRIBERY BILL AFTER PRESSURE

British political party the Conservatives have responded to
pressure from trade body the Confederation of British Industry
by adding more than 20 amendments to a new bill designed to
tackle bribery and corporate corruption. The bill is a response
to accusations that Britain has a poor record of tackling
corporate corruption, as highlighted by the recent fining of
arms manufacturer BAE Systems (BAES.L: ) for bribery offences.
Campaign group Transparency International expressed concern that
the Conservatives may have been attempting to derail the bill.
The CBI has claimed that the bill could harm the competitiveness
of British industry in the EU.

Stock

PRESS DIGEST – British business – April 6