Thursday, September 10, 2009

UNISONActive: Time for Pension Funds to Control Executive Pay

“UNISONActive is produced by UNISON activists for UNISON activists. Bringing news, briefings and events from a progressive left perspective”.

A warm welcome to Blogland to the new site UNISON Active. It is bright, informative, sparky and well designed. This article on why it is about time that pension funds took action to control Executive Pay is just absolutely spot on.

As it says UNISON members via their pension and life assurance funds actually own big chunks of the Banks yet we supposedly allowed their managers to bankrupt themselves then we as tax payers had to bail them out. Now UNISON members are expected to take a drop in income in order to pay for all this???

We do need fundamental change to prevent this happening again. We cannot continue to allow control of our capital to be handed over to city fund managers who simply don’t give a damn over the long term performance of our money. They themselves are judged by short term investment performance every 3 months and sacked if they don’t perform. So it is not surprising that they appoint Bank Executives who promise fast returns in return for fat bucks. They are speculators not investors.

Paul Myners, the Minister for the City put it like this…."Disengaged investors lead to ownerless corporations and the risk of unaccountable executives and boards running amok."

Pension and life assurance policy holders are by definition in it for the long term. Despite my youthful good looks I have already 22 years of pension contributions and it will be another 19 years until I retire (hopefully 65-ish). Fingers (and toes) crossed I will then probably live another 20 years. There then of could also be a spouse pension.

So I’m interested in a 60 odd year relationship with my investments not just 3 months or 3 years. If my pension investments were properly aliened with my true interests then my fund managers would ensure the executives of companies they invest in on my behalf are rewarded on the basis of the long term added value and security they give to my fund.

BYW - I actually remember in the 1990's my fund sacked Paul (Now Lord) Myners who then worked for Gartmore as our senior fund manager due to short term "performance". The manager we appointed to replace them didn't do that much good and we have since sacked them as well.

8 comments:

Tony C said...

Thanks John - I wasn't aware of the new site. It is excellent and I'll post a link to it around the stewards in my branch in the morning. The rebuttal of the Murdoch smears is something we need more of. Are you at the TUC next week? Any recommended fringes? I'm over in Liverpool Sunday/Monday.

TC

John Gray said...

Hi tony

Sorry - I didn't organise things before registration deadline. Say hello from me to Gloria Hanson (London UNISON TUC delegate) if you see her.

I'll watch the TUC TV!

Anonymous said...

time to cut the bloaters in the public sector...

Anonymous said...

You totally fail to grasp the problem John. This labour Government with "our most successful post war chancellor" at the helm has now borrowed the equivalent of 30,000 pounds per person in the UK. Governement debt is now £600bn and will be 1.4 trillion pounds by 2014. At this point the interest payments on the debt alone will be larger than the UK's entire education budget. This Government have borrowed the equivalent of 94% of our GDP (Obama in the US in contrast have borrowed only 25%). Time for pension fund control is locking the stable door after after the horse has bolted. Do you have any comprehension of the scale of the problem racked up by Gordon? And Barber tells the TUIC there is a choice about carrying on spending or not...i think you are delusional. Where do you think the funds to pay for this are coming from?

John Gray said...

Hi Anons

it was bloated private sector bonuses that brought this crisis about not the public sector.

Stuff and nonsense! Public debt is 53% of GDP and far, far below many of our competitors. We will bring debt down and a more fairer and progressive tax system will be key.

Anonymous said...

It was lack of Government regulation, a toothless FSA, and Gordon's lack of foresight that actually made the situation much worse in the UK. We also already have a progressive tax regime.

Rob said...

John,
I assume you have some inside knowledge of this project, so maybe you could ask for comments to be switched on - or at least some way of contacting the writer(s)?

John Gray said...

Hi Rob

Its not my site - it is a great idea mind and I wish I thought of it first.