Friday newspaper round-up: Bank bonuses, British Land, Enterprise Inns

14th Aug 2009 06:21

Senior cabinet ministers are so disappointed with the Financial Services Authority's new pay rules, released this week, they are considering whether legislation may be needed to crack down on bankers' bonuses.A number of ministers, including Lord Mandelson, the business secretary, are understood to be unhappy with the City regulator's remuneration code, which toned down some earlier suggested measures. Lord Mandelson thinks the guidelines, intended to reduce reckless risk-taking, have failed to reflect public concerns that the City is returning to "business as usual" after receiving billions in state support, the FT reports. Meanwhile, the City regulator's new rules on bonuses have created loopholes that banks could exploit to keep star employees on multimillion-pound packages, lawyers have warned. Hector Sants, chief executive of the Financial Services Authority, yesterday denied that the regulator's pay code for financial institutions, published on Wednesday, was too weak. He said that inclusion in the final code of a stipulation about guaranteed bonuses meant it was tougher than the March draft, the Times writes.Bank of America's Merrill Lynch unit is offering signing packages greater than those handed out in the bull market of 2006 and 2007, as it ramps up its recruitment programme to replace many financial advisers who have left its "thundering herd" in the past year. Industry recruiters and people within the company say Merrill Lynch Global Wealth Management is offering signing bonuses of 140% of the previous 12 months' "production" to lure top advisers, and another 200% over the next five years if the advisers hit aggressive growth targets, the FT reports.A consortium of some of the world's richest families is plotting a bid for British Land, the FTSE 100 property company that is one of the UK's biggest landlords. The group, which is thought to include Lakshmi Mittal - the Indian steel magnate who ranks as Britain's richest man - and the Abu Dhabi ruling family, has approached bankers from Credit Suisse to prepare a possible bid that could be worth as much as £10bn including debt, the Telegraph reports.Enterprise Inns, one of the UK's largest pub landlords, is in danger of breaching debt covenants as the rental value of its estate slumps. In a note to clients analysts at Goldman Sachs have warned that the falling values pose 'a threat to the group's financial structure', the Telegraph reports.Leading US food groups such as Hershey, Mars, and Krispy Kreme Doughnuts have warned the Obama administration that the country could "run out of sugar" and jobs could be lost unless curbs on imports are relaxed. The food producers, which also include Kraft and General Mills, gave the warning in a letter to the Obama administration, the Telegraph reports. The arrest of the four Rio Tinto executives in China on allegations of bribery and industrial espionage has heightened fears among foreign companies operating in the country. Lawyers and risk consultants operating in China have reported a surge in inquiries from clients worried that something similar might happen to their staff. One Beijing lawyer said that the incident had forced a number of Western companies to consider just how close they operated to an invisible line, the Times reports.Man Group, the hedge fund manager, said on Thursday night it had struck a deal to sell its remaining 18.4% stake in MF Global, the derivatives brokerage it spun off in 2007. Man Group said it had reached a variable forward sale agreement with Nomura International that guaranteed it an initial payment of $112m but would also allow it to profit from an appreciation in MF Global's share price over the next three to four years, the FT reports.Companies should issue non-voting shares to allow more activist shareholders to take a greater role in corporate governance issues, Lord Myners has suggested, in the latest of a flurry of controversial ideas put forward by the City minister. Under the latest proposal, Lord Myners said companies could make a 1-for-1 issue of non-voting shares to existing shareholders. These could then be traded in the market alongside voting shares, the FT reports.Asda attracted more than 18m customers a week for the first time in its 44-year history, but falling food inflation pegged back its recent powerful sales growth. The Wal-Mart-owned grocer posted underlying sales, excluding fuel, up by 7.2% in the three months to 30 June, down from 8.4% in the previous quarter, the Independent reports.