20 Apr 2011

What to read in the Financial Times

I read various newspapers, in an irregular manner. By that I mean that, although I have my preferences, I hold no newspaper subscription (apart from bike magazines that is) and try to take a look at a wide range of papers from time to time. But I rarely buy a paper more than three times per week.

I see the Financial Times regularly when travelling, but I only buy a copy very occasionally. It is often on offer for free on planes or in hotels, and I usually take it. Although I skip all the financial stuff which does not interest me, I nearly always find plenty of very good articles to read. In fact it is a great newspaper, since it confides its columns to people who can write and who know their subjects well.

On the topics that regularly interest me, the Arts articles are usually excellent, as is the wine section in the Weekend issue, written (usually) by Jancis Robinson. Amongst the regular contributors who write about business issues in a general way that links them to what I consider to be the real world (ie human beings), I always read what Lucy Kellaway has to say, as she is a brilliant columnist. She is shown on the top left-hand corner of the image below, and her column is usually to be found on a page called Business Life, which is quite suitable as she indeed covers the link between the two words.

In a copy of the FT (dated Monday April 18th 2011) that I picked up recently on a trip to London, she wrote about the salaries and bonuses of top executives, and the difficulty of finding clear information and honest justification for these amidst the waffle that fills the pages of companies' annual reports. She nearly always manages to make her subjects both clear and funny, and this article is no exception. I cannot resist quoting a couple of passages from it.

"I have just spent the morning doing something that has left me feeling bored and grumpy. I have been reading annual reports and proxy statements, concentrating on the bit where companies try to justify why their top person got paid quite so much. What has annoyed me isn't just the fact that most chief executives earn more than they are worth: this has been the case for such a long time that outrage fatigue has set in. Instead, it is the increasing quantity of flannel and pseudo-scientific analysis in which the numbers are now wrapped."

She goes on to give three examples, from the annual reports of Barclays, Hewlett Packard and Kraft. About the latter, she says this: "my favourite statement this year is Kraft's, which seeks to explain why Irene Rosenfeld got a bonus of $2.1 million in return for missing her financial targets. Just in case anyone is simplistic enough to think that if you don't hit the target you don't get a bonus, the report pulls out of the hat a whole new set of reasons for why she deserved one. Some of these are pathetically mundane....but other are more puzzling. "Improved talent pipeline developed through retention of Cadbury leaders" it says. I think this horrible, tortuous phrase means that Rosenfeld has hung on to a few top people at the confectioner - which isn't the impression one gets from reading the newspapers."

Kellaway concludes her article thus: "It makes me wish for a return to the bad old days when companies simply named the sum paid to the top people. No explanantions or excuses were given. Shareholders didn't have the foggiest idea of how the figures were arrived at, but then, for all the pages that I've ground through this morning, I'm none the wiser either. The bland numbers, stripped of all excuses, would surely be easier to grasp - and harder to defend. And they could be made harder still by the addition of one further figure: the ratio of the pay of the person at the top to the person at the bottom."

That's the stuff Lucy!

Read on ....


  1. Far more clever people than I – I won’t speak of you in your stead – have tried to elaborate on the principle and extend it to other fields. They ignominously failed, again and again and again. My comment will go in the opposite direction.
    My best friend – we have been tasting wines together for ages and all over Europe (quite) – sometimes used to buy cases for me while he himself did not like that particular wine, but with the full knowledge I would fancy the goodies. He stopped doing so, not because he was proven wrong one single time, but because the time for me is not one for BUYING wine, but rather for trying to sell some.
    More than once, I reciprocated with identical success. I stopped, not because I failed to guess his taste and preferences, but because I haven’t got the cash advance.

    This implies that, somehow, we managed to convey our reciprocal preferences in such a way as to make them clear, reproducible and easy to anticipate. So, surely, there is such a thing as “common good taste” in wine and “right words to express one’s perception”. My recommendation would be : keep it simple and use words or everyday life, with a strong descriptive value. Features as “balance”, “elegance”, “finesse” are bullshit as far as communication is concerned – even though they clearly do exist. Vocables like acidic, sweet, cherry flavour, lemony, honey ... are to be preferred.

    Still, you encounter your odd – mostly French – journalist who describes:
    “Parfums de sous-bois et de fleurs des champs, comme de la fougère au lever du jour ... ».
    Stuff it up your ... nostrils.

  2. Sorry, this post should have ended one step above. What a Madness!

  3. Luc, given most of what you say above, I fully expect that you will appreciate today's post on the Heisenberg principle!

    I fact, I am quite amazed that your comments were not (apparently) linked to this particular article (the Heisenberg one).

    An interesting case of shifting relativity?

    Anyway it is about time that I ordered some of your wine!

  4. What a shame, what a disaster : my post WAS intended to appear in connection with the Heisenberg’s principle. And, as I later realized I had included it at the wrong place, I posted a second remark stating just that (with a pun on One Step Beyond and Madness, I admit).
    But my message has apparently not been understood; read: it was not clear.
    So, yes it was connected with Heisenberg’s principle.
    You see, you cannot be sure of the meaning of the message AND the place where you put it at the same time. Another interpretation of uncertainty.