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• Unions urged UK wage review bodies to challenge government and recommend significant increases for key workers

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As the FT’s Lex column recently noted, concern over skyrocketing executive compensation is nothing new. However, the pandemic – alongside the growing emphasis on environmental, social and governance standards – has strengthened the case for reform.

Today we report how the rewards for bosses of FTSE 100 companies in the UK have fallen by more than a fifth since the onset of the crisis, as investors scrambled to get them to take a fair share of the pandemic pain suffered by their workers and shareholders. .

Hot spots in recent weeks include Foxtons, where shareholders rebelled against a bonus for the managing director of the UK estate agent, despite £ 7million backing for the company, an emergency fundraiser and a fall in the share price.

As we also report today, that mood is echoed in the United States, where ‘say on wages’ votes have given shareholders the opportunity to reprimand boards of directors for attempting to relax corporate targets. performance during the crisis. Investors last week exploded over a $ 230 million deal for General Electric’s Larry Culp, which was reformulated during the pandemic to make it easier for him to earn bonuses.

So far this year, bonus support in the US is at its lowest level since 2011. While the votes are only advisory, the damage can be severe, indicating “blood in the water”. “A bad opinion on the salary vote is one of the clearest early warning signs that an activist is going to knock on your door because they have seen that shareholders are upset,” said a legal expert.

As FT columnist Helen Thomas points out, investors in this unprecedented pay season are looking for an appropriate justification for bonus payments, taking into account that a company needed government help to survive. pandemic and how she treated staff and shareholders in the process.

“Boards of directors wishing to retrospectively adjust goals or benchmarks to bring payments that are now inaccessible within reach would face resistance,” she said. “In the context of the pandemic, huge salary rewards and flabby board oversight are more than ever in vain. But let’s hope investor activism on compensation outlasts Covid-19. “

Mondial economy

Economists’ estimates on the effect of EU recovery fund – ahead of the bloc’s own forecast expected on Wednesday – are increasingly optimistic. The € 800 billion next-generation European fund, as it’s officially called, along with member states’ spending plans, could increase eurozone GDP by 3.5%, according to Morgan Stanley. Investor confidence in the economy has reached a three-year high, according to a new survey. Olli rehn of the European Central Bank’s Governing Council told the FT that the ECB should follow the US Federal Reserve by agreeing to exceed its inflation target to compensate for years of weak price growth.

Latin America, the region worst affected by the pandemic, relies heavily on vaccine shipments from China as it battles a third wave of infections, according to an analysis by FT. LatAm governments have suffered greatly from the transfer of much of the region’s vaccine manufacturing capacity to cheaper sites in Asia.

Russia was hit by labor shortages caused by a drop in the number of migrant workers from Central Asia as pandemic border closures took effect. Their home countries have also been hit hard by the drop in remittances, which typically account for a large part of their GDP.

Business

American banks are much more eager to bring their employees to the office than their European counterparts. Compare the decision of JPMorgan chief Jamie Dimon to cancel all Zoom meetings because he is “done” with the dismissal of Frédéric Oudéa from Societe Generale as outdated “the idea that winning is just spending 22 hours by day at the office ”. FT editor-in-chief Andrew Hill said workers would end up coming back because they missed their colleagues, not because they were looking for the material benefits of an office.

Businesses support post-pandemic spending management training, according to a new FT survey, while Andrew Hill, in another column, says there are lessons to be learned from how business education developed after WWII. Get the full picture in our latest Annual Report on the industry, with directories of program providers and open enrollment courses for managers.

The pandemic has proven to be a supreme opportunity for innovation in business models, says Serguei Netessine of the Wharton School at the University of Pennsylvania. The “innovate or perish” environment has led to new ways of delivering goods and services without needing the usual research and development costs, she says. However, the rise of completely new types of business requires special attention from policy makers, says FT columnist Rana Foroohar.

The steps

Price for iron-ore, the steel ingredient, jumped more than 10 percent in Asian trade today as prospects for a global economic recovery, fueled by demand in China, intensified. Steel production in China alone jumped 19% in March.

An index tracing the largest trucking and logistics businesses have grown more than 25% year-to-date, underscoring the strength of the country’s rebound. “Now is the right time to shake things up. There is a lot of demand, but not a lot of supply, ”said a finance executive.

Corporate debt Levels have risen sharply as companies attempt to repair the damage the pandemic has caused to their balance sheets, but, according to financial markets reporter Joe Rennison, there is growing debate over whether debt – the traditional measure of debt – is still the best benchmark for credit risk.

The essentials

Boris Johnson has laid out the next steps to facilitate the lockdown of England, allowing people from different households to meet inside for the first time since Christmas, including in pubs and restaurants. Hotels, cinemas and indoor sports facilities may also lift the shutters. Visit the FT lock tracker to compare responses from governments around the world.

Have your say

Matt comments on five reasons why economists misjudged U.S. salary data:

If you live under constant threat the school might call and say, ‘Sorry, we have a Covid outbreak! Pick up your child within an hour and we are closed for the next 10 days ”- you cannot work full time. You are at best part-time or self-employed.

Final reflection

With the very wealthy opting for private jets and smaller modern planes leaving little room for thrift stores, are these curtains for first class travel?

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