If you think bankers are greedy and self-interested, you should meet fund managers

The latest incomes data shows bankers still getting obscenely high remuneration and whopping big bonuses, yet they are being overtaken by another group within the finance sector.   Fund managers have now overtaken the pay and bonuses of bankers, though they’re keeping it very quiet.   They say there’s no need for customers (i.e. the investing public) top know about their pay because all the overall data about running a fund – its cost, performance, etc. – is already published.   But this evades the role which fund managers should be playing, but are not playing, under free-markets anything-goes contemporary capitalism. 

These executives who manage the enormous pension and insurance funds that make such a large part of Stock Exchange shareholdings are the same persons who both usually exercise a decisive vote at company AGMs, over contested merger and acquisition issues, and at determining the boss’s pay in remuneration committees.   Whereas all these major decisions should be taken independently at arms length, or at least within a much wider and more representative forum, the fund managers co-exist within a closed circle around the top and thus have all the big decisions neatly sewn up – for which they are rewarded with the riches of Croesus.

In any accountable economic system the fund managers should be the guardians of good corporate governance, both in terms of insisting on objectivity and independence for decisions made at the top of the business world and also demanding that pay and incentives are moderated to a degree that is socially acceptable.   They do the reverse.   By encouraging, or at least not fretting at, greed in the boardroom they indirectly get a kickback in their own exorbitant fees.

Fund managers are at the epicentre of non-accountability in the City of London.   They exercise no leverage against excessive pay because they refuse to make public their own out-of-control remuneration.   Their boast of pay-for-performance is nullified by their insisting on rewarding themselves with the same proportion of assets even when in the good times these assets are rapidly swelling.   Fees should be falling as investment houses get bigger, and the benefits of size should be passed on to individual investors,but they’re not.

In the last 30 years the proportion of share on the Sock Exchange held by individual investors has nosedived till it is now a mere 10%.   Their place has been taken either by big foreign interests (who now control half of all Stock Exchange holdings) or by the big UK institutional funds.  With this degree of shareholder control vested in fund managers’ own hands goes crude power.   It is another example exposing how the checks and balances have been eroded away within an increasingly rotten capitalism.

 

3 thoughts on “If you think bankers are greedy and self-interested, you should meet fund managers

  1. until they brought to justice to answer for their greed then on it goes but once again are you the voice in the wilderness has these people should with the banksters be locked up

  2. Oh do give it a rest.

    Blah, Blah, Blah, Blah, “In any accountable economic system the fund managers should be the guardians of good corporate governance,” true; and MP should not be thieving parasites for hire; labor peers, former civil servants and the spouses of former PM’s should never have been allowed to invest in private health care providers; the people who were responsible for the culture of abuse at Mid staff and elsewhere should have been prosecuted by now; and so on ………………………..

    The list malfeasances and of sheer blatant unambiguous public criminality is long and getting longer by the day and financial services are merely the tip of that iceberg.

    Meanwhile the government sponsored exploitation of poorest in our society, forced labour for the unemployed and the continuing and deliberate, “cull,” of our sick and the disabled which continues unabated with scarcely a comment at all from the labour party, (bar a few tired and insincere platitudes,) now being led, (if that’s even the right word,) by a sticky fingered public school boy and an overpromoted nonentity, both well to right politically of the late and unlamented Margaret Thatcher at her most completely barking. .

    http://www.theguardian.com/business/2015/mar/04/george-osborne-dodges-questions-over-hsbcs-stephen-green

    “Only one person in the UK has been prosecuted so far, while around 1,000 have been allowed to pay up and therefore escape court. Downing Street has so far refused to hold an inquiry into HMRC’s decisions or review its prosecution policy.”

    Contrast this nonsense with the US who have actually prosecuted HSBC, (who are still effectively on parole as it were, under a 5 year Deferred Prosecution Agreement; or such is my understanding,) vigorously, robustly and effectively and levied not just an admission of guilt, but a record but record fine with worse to come if they persist.

    Bankers, fund managers; pantomime villains for cheap childish political melodrama whilst the real criminals, men like Blair, Green, Straw, Nicholson and even the small fry like Laws, Miller, and the far too many other can still walk about in public with smug grins on their faces, completely confident that their well documented wrong doing will in no way inconvenience them.

    “To have once been a criminal is no disgrace.”
    ” To remain a criminal is the disgrace.”

    Malcolm X

  3. Mr Meacher, I confess to being confused at your reference to the US treatment of HSBC. Has the US DoJ jailed any bankers as a result of the Criminal derivatives fraud that has shattered hundreds of millions, if not Billions, of peoples’ lives. NO. It has not. One or two fines, carried upon the backs of the suckers invested in those banks while the general public everywhere but Iceland. carry the millstone of Bankster welfare around their necks: Put there by politicians like yourself, that talk the talk.

    In the USA the pillars of a fair society do not exist. Neither do they here in Great Britain: A satrapy of the City of London.

    In the USA the Congress holds complete power: Presidential veto is meaningless, in that it can be overturned by either congress or a properly “stacked” Supreme Court, as demonstrated by Pres Ulysses Grant when the Fiat money scam was endangered. Perhaps here we see why the UK Supreme Court was positioned to usurp the House of Lords role as a check on the Commons, now subverted by corporate power.

    Why is debate necessary? The banks are guilty as hell, and we ALL know it. Spin will not work for much longer. Do I hear the rumble of tumbrils in the distance?

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