This is what the FT said about the bosses of AOL and Time Warner when the two companies merged ten years ago:
The future they have glimpsed is one in which consumers and employers live in a permanently connected world. Broadband communication networks would pipe all manner of information and entertainment to television sets, personal computers and other appliances not yet imagined. Ubiquitous wireless gadgets would make it possible to work, communicate and be entertained from anywhere.
They weren’t that far wrong, even if the merger didn’t work out. Michael Skapinker says: “The problem was that, having precisely foretold the future, they could not get their company to deliver it.”
I have ended up writing quite a few articles about executive pay over the years. Like Michael Skapinker, I have heard this argument from many interviewees:
Why did senior executives believe they deserved to earn so much? “Because,” they said, paraphrasing the L’Oréal advertisement, “we’re worth it.” A war for talent was raging. If you paid peanuts you got monkeys.
As Skapinker says, this way of thinking doesn’t really work any more.
The problem, as is now clear, is that companies paid far more than peanuts but got monkeys anyway. The financial blow-up demonstrated that many highly rewarded people did not know what they were doing.
He seems to think that this latest public furore over pay is different to the others he has witnessed in the past 23 years and that reform is on the way. I’m not so sure. Many of those I’ve spoken to while researching the topic don’t seem to think anything will change much. Skapinker asks if journalists will still be writing the same pay stories two decades from now. I can’t help feeling that we will.
Published on
August 21, 2009 in
Business.
Guess who said this back in September 2006:
… by leaping into home ownership many people risk borrowing much more than they can afford, overstretching themselves and getting into financial ruin.
Answer: Martin Lewis, the self-styled “money saving expert”. Kudos to him for that. Read the rest here. His advice at the time was “plan for the worst and hope for the best” – advice which some people would have done well to take!
Published on
August 14, 2009 in
Business.
Earlier this week, the Audit Commission warned that the second wave of the UK recession would lead, among other things, to an increase in domestic violence.
Today, we learn that sales of Stella Artois are surging. That’s a beer better known to hardened drinkers as “wife-beater”.
Can’t be just a coincidence, can it?
Interesting analogy from the BBC’s outgoing Washington correspondent Justin Webb in his last report from the US for Radio 4′s From Our Own Correspondent . Having described the country as “little more than an eating competition, a giant, gaudy, manic effort to stuff grease and gunge into already sated innards,” he goes on to analyse the origins of the global financial crisis:
You could argue that the sub-prime mortgage crisis – the Ground Zero of the world recession – was caused mainly by greed: a lack of proportion, a lack of proper respect for the natural way of things that persuaded companies to stuff mortgages into the mouths of folks whose credit rating was always likely to induce an eventual spray of vomit.
As one of Justin’s American friends might say: Eww! Gross!
Disappointing news for Internet startups:
“… in the main, it has been the well-established retailers that have profited from the rising popularity of internet shopping, rather than the brash newcomers.”
That’s according to this article in today’s FT. With hindsight, it seems amazing that anyone ever expected it to be any other way.
