Can we talk about Carillion

Discussion in 'UK politics, current affairs and news' started by gawkrodger, Jan 13, 2018.

  1. existentialist

    existentialist Danced on by a twerking bee

    I'd like to think that this was part of a game changing phase in UK business/politics, but I'm so beaten down by repeated failures of what seemed to me obvious examples of things being shit to result in any change that I'm a bit cynical about that possibility.

    Really, what we are looking at here is the complete and utter public discreditation of the PFI/privatisation craze, and it should spark a noisy public movement to start reversing that - not just "where possible", but "on principle". I'm pessimistic about whether that will happen.
  2. SpookyFrank

    SpookyFrank We kill the flame

    70% extra cost for using PFI to build hospitals. I knew these people were taking the piss but that's insane.

    It's outright theft; made possible by ubiquitous, institutional, bone-deep corruption.
  3. alex_

    alex_ Well-Known Member

    The ftse 100 has combined pension deficit of 87 bn gbp.

    If you legislate that these need to be fixed very quickly some of these companies will go bust immediately, and pensioners will be left short.

    The only way to fix is is over decades, as a result some companies will fold before they fix them, and pensioners will be left short.

    There is no easy answer to this, saying that companies with deficits are stealing pensioners pensions is hyperbole.

  4. SpookyFrank

    SpookyFrank We kill the flame

    So it's OK if everyone does it?
  5. elbows

    elbows WoeTimer

    I am not convinced by this 'only way to fix is over decades' stuff, given that I read an article someone linked to earlier in this thread:

    After Carillion how many firms can the pensions lifeboat rescue?
    Plumdaff, Almor and SpookyFrank like this.
  6. GarveyLives

    GarveyLives Well-Known Member

    I thik that you will find that Lord Denning took a different view as long ago as 1971, let alone the modern view of corporate governance, post-Cadbury, post-Greenbury and so on.

    However, I accept that the role of the Secretary has rarely been reviewed in modern governance scandals.
  7. GarveyLives

    GarveyLives Well-Known Member

    As predicted ...

    Carillion audit chair under pressure to quit Victrex board]Carillion audit chair under pressure to quit Victrex board

    Ex-Carillion boss resigns from Aberdeen oil services giant


    Hopefully, Mr Howson (above) will be just about managing to be able to get by ...
  8. Chilli.s

    Chilli.s changed the little words

    Just how can you get a bonus for running a company that folds less than a year later. Corrupt? Criminal?
  9. alex_

    alex_ Well-Known Member

    The devil is in the “Of the 14 companies which would require more than two years” eg iag’s deficit is 80% of its market capitalisation, and about 5x it’s last profit.

    Overly aggressive legislation to resolve pensions deficits will kill final salary pension schemes.

  10. agricola

    agricola a genuine importer of owls

    IAG is never a good example, unless you are talking about how dreadful a firm is.

    I agree that overly aggressive legislation is not required however; all you'd need to do is make sure that the pension fund deficit is recorded in the accounts as debt, with the resultant effect it would have on bonuses, performance related pay etc. You'd close the gap in 90% of firms.
    SpookyFrank and Badgers like this.
  11. 1927

    1927 Funnier than he thinks he is.

    They're dead already!
    SpookyFrank and Badgers like this.
  12. elbows

    elbows WoeTimer

    Sadly there is plenty of evidence that this is the case.
  13. alex_

    alex_ Well-Known Member

  14. 1927

    1927 Funnier than he thinks he is.

    Thats why I made the comment!
  15. 1927

    1927 Funnier than he thinks he is.

  16. Bahnhof Strasse

    Bahnhof Strasse Free the Sepsis Six!

    Seeing as you have told us his ring-fenced salary was £660,000.00 for a single year’s work destroying a business, I doubt we’ll be seeing him down the food bank anytime soon.
    teqniq likes this.
  17. GarveyLives

    GarveyLives Well-Known Member

    The 'Single figure of remuneration' (Salary/fees, Benefits, Bonus (the cash value of the bonus earned in respect of the year including, where relevant, the value of deferred shares, which must be held for a minimum three-year period), Long-term incentives (the value of performance-related incentives vesting in respect of the performance period ended 31 December 2016.) and Pension (the cash value of pension contributions received by the Executive Directors. This includes Carillion’s contributions to the defined contribution pension plan and any salary supplement in lieu of a Company pension contribution and the allowance paid for salary in excess of the internal cap on pensionable salary)) for Mr Howson which appeared in the 2016 Carillion plc annual report was £1,510,000

    Mr Howson retained the fee of £35,374 paid in 2016 relating to his role as a Non-Executive Director of Wood Group plc and had 22 years of service with Carillion "in a variety of roles" and had been on the Carillion plc board for over 7 years.


    "In line with best practice and the Directors’ Remuneration Policy, increases in salary for Executive Directors will not normally exceed the range of increases awarded to other employees in the Group with the exception of the specific circumstances listed in the binding policy.

    In recognition of this policy and as explained in detail in the 2014 and 2015 Remuneration reports, the Remuneration Committee implemented a phased increase to Richard Howson’s base salary in January 2015 and January 2016 to reflect his contribution to the business and his experience in his current role.

    The second of these increases was contingent on a continued improvement in both corporate and personal performance."

    (Source: Carillion plc 2016 Directors' Remuneration Report)
  18. Bahnhof Strasse

    Bahnhof Strasse Free the Sepsis Six!

    He should be put against a wall and shot.
    SpookyFrank, marty21 and mather like this.
  19. mather

    mather Well-Known Member

    Ideally but I'd settle for him serving a long time in jail, maybe even a life sentence given the scale of this scandal. Even more importantly, I hope this scandal finally puts the final nail in the coffin on PFI and the whole process of privatising and introducing the market to the public sector.

    I mean how many more examples do we need for PFI and privatisation to become politically toxic, so that any politician who supports this crap can face losing his/her seat?
  20. teqniq

    teqniq DisMembered

  21. existentialist

    existentialist Danced on by a twerking bee

    Worst case - they enact some shite legislation that actually makes life more difficult for all businesses, but which huge corporations can easily wriggle out via sweetheart deals and lawyering up.

    Likely case - it's all words, and the whole matter will be quietly dropped just as soon as it's expedient to do so.

    What I cannot understand - through applying principles of fairness and natural justice (yes, I know :facepalm:) is how it can ever have been appropriate for pension contributions to appear on a company's balance sheet, far less be able to be raided more or less at the whim of directors. That is money which has been set aside for a very specific purpose, and it seems utterly logical to me that, having set it aside, it should be treated as such, and not just as another pot to dip into when companies feel like it.

    To me, the only reasonable way to go is for pensions to be managed completely outside the company - contributions are paid into a fund that is managed by a specialist pensions operation, much like any of us would do with a personal pension, and to which the company does not have any kind of routine access. Perhaps there's scope for dealing with pensions "surpluses" (although I can't see why the pensioners shouldn't benefit from those), but it needs to be managed carefully, and be subject to strict oversight.

    I am sure there is some factor that I'm overlooking here, and that this is probably a very naive way of looking at it, so I'm glad to be educated on the matter. It's just that too many people seem to find that the pension they've been paying into for years, and are relying on for their retirement, is suddenly evaporating because their employer went bust, or got asset-stripped, and I can't see any justification for it.
  22. teqniq

    teqniq DisMembered

    In a parallel universe perhaps

    Treasury Minister says backlash to Carillion must not 'throw baby out with the bath water'
    agricola and Pickman's model like this.
  23. GarveyLives

    GarveyLives Well-Known Member

    Public relations slogans and waffle.

    If she considered these issues to have been important, why wasn't action taken before this recent event?
    existentialist likes this.
  24. GarveyLives

    GarveyLives Well-Known Member

    Can we talk about Carillion

    An alternative analysis to that recently available in the corporate media:

    "Carillion, momentarily the biggest and brightest star in the UK construction firmament, has crashed and burned. Brian Parkin explains that the company wasn’t an exception, but all too typical of the spiv business model the dominates UK construction ..."

    Carillion: a chronicle of a blacklisting crook foretold (click for more)
    existentialist likes this.
  25. existentialist

    existentialist Danced on by a twerking bee

  26. existentialist

    existentialist Danced on by a twerking bee

    Oh, here we go. Laying the ground for the idea that it is possible to be too draconian in dealing with the crooked antics of these shyster companies, so that any meaningful sanction or tightening of regulation can be painted as extremism, or "throwing the baby out with the bathwater".

    The baby shat in the bathwater - that's why we're even throwing anything out. We may want to hang onto the baby just long enough to find out why it's incontinent, I'll give her that...
    Bahnhof Strasse and teqniq like this.
  27. agricola

    agricola a genuine importer of owls

  28. BemusedbyLife

    BemusedbyLife Well-Known Member

    All the pension schemes I know about (ie mine) are managed from outside the company, I thought that was the law but perhaps I'm wrong? I believe that if there is a shortfall then the company is responsible for making that up but a lot of them put that on the back burner since it costs so much money. I worked for Wankers Inc for 2 years after leaving Uni before my job got shipped off to India and my Dad worked there for 12 years (different site) before he got fed up and left to work for himself. About a year ago they sold off the division we both worked for to Even Bigger Wankers PLC and even though we had both left (involuntarily in my case) we got letters from the Pension Fund saying that as part of the deal Wankers Inc had ponied up a billion notes to make sure that the Pension Fund was fully funded otherwise the sale couldn't go through.
    I'm pretty sure Carillion knew there was not enough money in the Pension Fund but just kept putting off making it up in the hope that either there would be a massive upsurge in the stock market to make it unnecessary or they would sign some huge deal that would get them rolling in cash. I believe that the 600 million debt on their balance sheet is what they should have put it but haven't, I don't believe they can dip into any money they already paid over. Wasn't there a case of some businessman back in the 80's or 90's doing that and the law was changed?
  29. Ponyutd

    Ponyutd Greebo likes this....r.i.p.

    Diane Abbott has just asked Jeremy how many a Carillion is.
    mather, gosub and cupid_stunt like this.
  30. cupid_stunt

    cupid_stunt Dyslexic King Cnut the Great.

    :D :D :D :D
    angusmcfangus likes this.

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