Can anyone explain just what it is that highly paid Academy trustees are bringing to the table that school governors (mainly unpaid) didn't/don't' ? http://www.bbc.co.uk/news/education-43569932
('Professionalism' is not an adequate answer.)
The PAC report seems confused as to whether these high salaries are going to trustees or senior staff. There are laws about paying trustees, although they don't completely prevent trustees being paid and the existence of laws doesn't stop them being broken.
The report compares these to average head teacher salaries. Whether that comparison is appropriate depends on the role. Many academy trusts run multiple schools so a comparison with senior LA staff may be more appropriate. It is also worth pointing out that some state school head teachers are paid at a similar level, although in some cases this is due to bonuses for other work.
Debt financed share buybacks may increase shareholder value.
But by weakening the balance sheet that weakens the covenants that protect pensioners, employees, debt provides and - via the interest shield - reduce tax payments.
Shareholders benefit but everyone else loses. That’s not right
I quite agree that it's not right. But arguably the flaw is in the system which encourages such an action? We need regulations and taxes to redress the balance.
The theoretical flaw was always there but it’s more the cultural impact of a narrow focus on shareholder value (it’s the same as the proposed Aviva preference share cancellation which was just wrong).
Amending remuneration systems would be a good start. I’d also look at limiting the tax shield on interest (and certainly for shareholder loans). More general tax or regulation probably not needed
I agree on the tax shield (and should have been more precise that I mean we need to adjust the balance of taxes which privileges x rather than y) - but I'm not that convinced that remuneration system changes will be that effective.
Feels like ignoring the more fundamental problem.
The remuneration point is nudge theory. EPS is the wrong way to set remuneration because it can be fiddled (eg share buybacks increase eps without increasing the value of the company). I’d rather look at a measure of enterprise value instead.
Debt financed share buybacks may increase shareholder value.
But by weakening the balance sheet that weakens the covenants that protect pensioners, employees, debt provides and - via the interest shield - reduce tax payments.
Shareholders benefit but everyone else loses. That’s not right
I quite agree that it's not right. But arguably the flaw is in the system which encourages such an action? We need regulations and taxes to redress the balance.
The theoretical flaw was always there but it’s more the cultural impact of a narrow focus on shareholder value (it’s the same as the proposed Aviva preference share cancellation which was just wrong).
Amending remuneration systems would be a good start. I’d also look at limiting the tax shield on interest (and certainly for shareholder loans). More general tax or regulation probably not needed
I agree on the tax shield (and should have been more precise that I mean we need to adjust the balance of taxes which privileges x rather than y) - but I'm not that convinced that remuneration system changes will be that effective.
Feels like ignoring the more fundamental problem.
The remuneration point is nudge theory. EPS is the wrong way to set remuneration because it can be fiddled (eg share buybacks increase eps without increasing the value of the company). I’d rather look at a measure of enterprise value instead.
But shouldn't the people who hired the CEO be smart enough to come up with a sensible remuneration system that isn't so easily gamed?
I'm unconvinced there's a role for govt to get involved here by saying how people should be remunerated (which I think is what you are suggesting).
None of those come across as particularly benevolent, Mr.D... As for Hiero, his failure to provide for a competent successor saw the utter destruction of Syracuse and enslavement of much of its population. Nice while it lasted, though.
King Cole, it absolutely should be and they can damned well afford it. I have vague memories of a story about Leeds United not having to pay those fees any more a few years ago because the taxpayer would from now on, ending the longstanding and very sensible arrangement, so it may well be a nationwide rather than local piece of idiocy.
That’s mad, I can’t be the only one who thought the cost of policing football matches was already bourne by the clubs. Football is a massive drain on police resources.
Mr Pit: rather off-topic, but I believe there's going to be a SpaceX launch a little after 14.00 today.
But by his own account he did rather well financially over the last year, which would be relevant to any such discussions.
It would be relevant but it won't change the position much, if at all. See Sharp v Sharp [2017] EWCA Civ 408. The couple were married for 4 years. At the start of the marriage their financial positions were similar. During the marriage Mrs Sharp received bonuses totalling £10.5M. The Court of Appeal decided that Mr Sharp was not entitled to anything like 50% of the assets as it was a short marriage and most of the assets had been generated by Mrs Sharp.
Here we are dealing with an even shorter marriage. I therefore doubt she will be entitled to anything like 50% of the assets generated during the marriage.
This discussion does, of course, assume that they are divorced in the UK. If the divorce is in another jurisdiction SeanT's wife is likely to do worse than she would in the UK courts.
Can anyone explain just what it is that highly paid Academy trustees are bringing to the table that school governors (mainly unpaid) didn't/don't' ? http://www.bbc.co.uk/news/education-43569932
('Professionalism' is not an adequate answer.)
The PAC report seems confused as to whether these high salaries are going to trustees or senior staff. There are laws about paying trustees, although they don't completely prevent trustees being paid and the existence of laws doesn't stop them being broken.
The report compares these to average head teacher salaries. Whether that comparison is appropriate depends on the role. Many academy trusts run multiple schools so a comparison with senior LA staff may be more appropriate. It is also worth pointing out that some state school head teachers are paid at a similar level, although in some cases this is due to bonuses for other work.
Yes, it's not entirely clear (which rather underlines the call for more transparency...)
I quite take the point about the replacement of Local Authority function, though how successfully is an open question (as is the justification for some of the very high salaries paid to executive heads). My question related specifically to the remuneration of trustees (who are in the case of academies are legally directors, and who may be paid).
Debt financed share buybacks may increase shareholder value.
But by weakening the balance sheet that weakens the covenants that protect pensioners, employees, debt provides and - via the interest shield - reduce tax payments.
Shareholders benefit but everyone else loses. That’s not right
I quite agree that it's not right. But arguably the flaw is in the system which encourages such an action? We need regulations and taxes to redress the balance.
The theoretical flaw was always there but it’s more the cultural impact of a narrow focus on shareholder value (it’s the same as the proposed Aviva preference share cancellation which was just wrong).
Amending remuneration systems would be a good start. I’d also look at limiting the tax shield on interest (and certainly for shareholder loans). More general tax or regulation probably not needed
I agree on the tax shield (and should have been more precise that I mean we need to adjust the balance of taxes which privileges x rather than y) - but I'm not that convinced that remuneration system changes will be that effective.
Feels like ignoring the more fundamental problem.
The remuneration point is nudge theory. EPS is the wrong way to set remuneration because it can be fiddled (eg share buybacks increase eps without increasing the value of the company). I’d rather look at a measure of enterprise value instead.
But shouldn't the people who hired the CEO be smart enough to come up with a sensible remuneration system that isn't so easily gamed?
I'm unconvinced there's a role for govt to get involved here by saying how people should be remunerated (which I think is what you are suggesting).
It should be for the shareholders to fix not the government.
Comments
http://thaddeusthesixth.blogspot.co.uk/2017/03/benevolent-dictators.html
The report compares these to average head teacher salaries. Whether that comparison is appropriate depends on the role. Many academy trusts run multiple schools so a comparison with senior LA staff may be more appropriate. It is also worth pointing out that some state school head teachers are paid at a similar level, although in some cases this is due to bonuses for other work.
I'm unconvinced there's a role for govt to get involved here by saying how people should be remunerated (which I think is what you are suggesting).
As for Hiero, his failure to provide for a competent successor saw the utter destruction of Syracuse and enslavement of much of its population. Nice while it lasted, though.
NEW THREAD
Here we are dealing with an even shorter marriage. I therefore doubt she will be entitled to anything like 50% of the assets generated during the marriage.
This discussion does, of course, assume that they are divorced in the UK. If the divorce is in another jurisdiction SeanT's wife is likely to do worse than she would in the UK courts.
I quite take the point about the replacement of Local Authority function, though how successfully is an open question (as is the justification for some of the very high salaries paid to executive heads).
My question related specifically to the remuneration of trustees (who are in the case of academies are legally directors, and who may be paid).