Mark Kleinman: Bonfire of the regulators just beginning
Mark Kleinman is Sky News’ City Editor and the man who gets the Square Mile talking in his weekly City PM column. This week, he tackles churn at the regulators, bankers’ bonuses and dilemmas at Deliveroo.
Bonfire of the regulators is just beginning
For Marcus Bokkerink, read Abby Thomas? The chief executive of the Financial Ombudsman Service last week became the latest casualty of an escalating purge of regulatory figures marked out as being insufficiently aligned with the government’s economic growth agenda.
As I reported on Sky News, Thomas – who had been in the job for little more than two years – fell foul of a board unhappy that she was advocating an cheaper route for claims management companies to bring complaints against financial services groups.
It can hardly be coincidental that the day after Thomas’s departure, the FOS announced the details of a charging structure to be levied on CMCs for the first time.
The proposals still bear little resemblance to a level playing field, but they are better than the status quo, which for years has been an ambulance-chaser’s paradise.
The refusal of the outgoing FOS chair, Baroness Manzoor, to answer MPs’ questions openly this week about the circumstances of Thomas’s exit was bizarre and concerning – transparency is the bare minimum the public expects from Britain’s economic policemen.
Thomas’s scalp is not exactly like that of Bokkerink’s, however, in that her exit did not directly come at the behest of frustrated ministers. Doug Gurr, the former Amazon executive, looks like a shoo-in to turn his interim role into a permanent position, despite the disquiet that will cause among those who believe it exposes a pro-big tech conflict of interest.
Anecdotal evidence suggests that there is already some change taking place under Gurr, with merger scrutiny processes giving companies more time to prepare responses to forthcoming pronouncments.
Neither Bokkerink nor Thomas will be the final victims – direct or indirect – of Labour’s sudden zeal to take the side of business.
Several other watchdogs’ bosses are also in the government’s firing line, according to senior business figures, while others expect entire agencies to be abolished as part of the government’s decision to clear the decks.
That will clearly be an uncomfortable time for many of them – that’s a telltale sign that on this at least, the government is pursuing a sensible agenda.
It pays (more) to be a bank chief
Three down, one to go: the boards of Britain’s biggest listed banks have been hard at work in recent weeks putting the finishing touches to their full-year results, beginning with Barclays today.
Within that, another pressing task has been occupying remuneration committee members at Barclays, HSBC and NatWest Group: how to increase their chief executives’ pay without arousing the ire of institutional investors and proxy advisers.
As I wrote here two weeks ago, it’s a safe bet that Barclays and NatWest have navigated that tightrope successfully. The fact that I’d wager that HSBC board members can also sleep easily ahead of its annual results next week provides decisive evidence that the mood among shareholders has changed, perhaps irreversibly.
Such has been the navel-gazing about the London Stock Exchange’s attractiveness that institutions appear to have been convinced by the argument that higher CEO pay is an essential ingredient to bolstering it.
That leaves Lloyds Banking Group as an outlier. CEO Charlie Nunn’s maximum remuneration package is ‘just’ £7.7m, barely half that of the new £14.3m deal handed to Barclays chief CS Venkatakrishnan.
For comparison, Lloyds’ market capitalisation of about £38.5bn is little more than 10% lower than Barclays’ £44bn.
This is the kind of rising tide dynamic, of course, loathed by high pay campaigners. That won’t, of course, deter Lloyds’ pay committee, which is due to put a new remuneration policy to shareholders in 2026. I would put good money on Nunn’s potential compensation package being a third or more larger when its results are published this time next year – and as I have written here before, I expect investors’ response to be muted.
The key takeaway from Deliveroo’s executive churn
When is a succession plan not really a succession plan? Just ask Deliveroo, the London-listed food delivery service.
I reported on Sky News this week that its board – chaired by the veteran director Claudia Arney – is actively weighing the timing of founder and CEO Will Shu’s departure from the company, which counts Wagamama and Waitrose among its partners.
In response, Deliveroo issued a curt statement insisting that Shu, who co-founded the company 12 years ago, had “no plans to step down”.
“Will remains relentlessly focused on the long term future of Deliveroo and delivering for consumers, merchants and riders,” it said.
Well, quite. As I pointed out in my story, formal decisions have yet to be taken by Arney and her colleagues, and the various scenarios – one of which would involve Shu retiring from the company as soon as this autumn – are at this stage hypothetical rather than concrete.
My revelation yesterday that Eric French, Deliveroo’s chief operating officer, would step down later this year, will add fuel to suggestions that there is more than meets the eye going on behind the scenes at the company, which has been wrestling with stalling growth and sharper competition for some time.
I’d also wager the cost of a reasonably sized takeaway that by this time next year, either Shu or Arney will no longer be in their current post.