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Wall Street’s biggest bank is lifting Brussels’ bonus cap for its London-based staff, weeks after rival Goldman Sachs fired the starting gun on a post-Brexit era in industry pay.

Sky News can reveal that JP Morgan Chase was in the process of notifying staff on Wednesday that it would preserve some elements of the remuneration packages introduced after the European Union’s cap on variable pay came into force in 2014.

The system prevents material risk-takers (MRTs) working in lenders’ operations in the EU from earning more than twice their fixed pay in variable compensation.

Sources said that JP Morgan, which employs 22,000 people in the UK, including roughly 14,000 in London, had decided to preserve a significant proportion of the fixed pay allowances used to calculate eligible employees’ maximum bonuses.

The US-based banking behemoth has also decided to raise its bonus cap threshold from two times’ fixed pay to a multiple of 10.

That would mean a senior JP Morgan banker or trader in Britain who earned £2m in annual fixed pay would, from this year, be eligible for a bonus of up to £20m, rather than £4m under the EU rules.

A source said that broadly maintaining fixed pay levels was desirable even for senior staff focused on managing monthly household expenses such as mortgages.

Responding to an enquiry from Sky News, a JP Morgan spokesman said: “We believe we have developed one of the most attractive and balanced pay structures in the industry. Fixed pay will remain very competitive, and we will have ample room to reward the highest performers appropriately.”

Sources close to the bank said its analysis suggested that the removal of the EU bonus cap was unlikely to materially impact total annual pay levels during the current financial year.

“Bonuses will continue to be discretionary and driven by performance on a year-to-year basis,” one insider said on Wednesday.

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The new structure is understood to be sufficiently flexible to adjust fixed pay levels if the regulatory landscape shifts further.

Sky News revealed details of Goldman Sachs’ plans last month, with the bank opting to increase its cap from 2:1 to 25:1.

Under Goldman’s revised structure, however, its fixed pay allowances are being largely removed, meaning bonuses will invariably be calculated from a lower base than those at JP Morgan.

The move by Wall Street’s two biggest investment banks to recalibrate how they approach pay for their top UK-based staff is expected to trigger an arms race among rivals as they seek to remain competitive.

A JP Morgan insider said the bank believed its revamped pay structure would be attractive both to bankers working for rivals, and those it wanted to lure to Britain from outside the country.

At Goldman, the firm’s boss outside the US said the bonus cap had prevented it from adopting a consistent approach to pay.

Banks argued against the bonus cap for years, saying it did nothing to reduce risk-taking behaviour and that in many cases it achieved the opposite.

Among those who publicly opposed it was Andrew Bailey, the Bank of England governor, who said in 2014 that it was “the wrong policy [and] the debate around it is misguided”.

Because the bonus cap does not impose a limit on overall remuneration, senior industry figures warned that it had placed upward pressure on salaries and allowances not linked to longer-term performance, and which could not be reduced or clawed back if failure or previous misconduct had subsequently emerged.

During his ill-fated stint as chancellor in Liz Truss’s administration, Kwasi Kwarteng moved to scrap the EU bonus cap, saying it would boost the international competitiveness of Britain’s financial services sector.

UK regulators agreed that scrapping the cap would aid financial stability by enabling firms to reduce pay faster during downturns or in scenarios where they needed to conserve capital.

Bosses at lenders such as Deutsche Bank and Santander have also criticised the cap, while Barclays and HSBC have won shareholder approval to remove the two-to-one pay.

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Hovis and Kingsmill-owners in talks about historic bread merger

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Hovis and Kingsmill-owners in talks about historic bread merger

The owners of Hovis and Kingsmill, two of Britain’s leading bread producers, are in talks about a historic merger amid a decades-long decline in the sale of supermarket loaves.

Sky News has learnt that Associated British Foods (ABF), the London-listed company which owns Kingsmill’s immediate parent, Allied Bakeries, and Hovis, which is owned by investment firm Endless, have been involved in prolonged discussions about a combination of the two businesses.

City sources said this weekend that the talks were ongoing, but that there was no certainty that a deal would be finalised.

Bankers are said to be working with both sides on the talks about a transaction.

A deal could be structured as an acquisition of Hovis by ABF, according to analysts, although details about the mechanics of a merger or the valuations attached to the two businesses were unclear this weekend.

ABF is also said to be exploring other options for the future of Allied Bakeries which do not include a deal with Hovis.

If completed, a merger would unite two of Britain’s best-known ambient food brands, with Allied Bakeries having been founded in 1935 by Willard Garfield Weston, part of the family which continues to control ABF.

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Hovis traces its history back even further, having been created in 1890 when Herbert Grime scooped a £25 prize for coming up with the name Hovis, which was derived from the Latin ‘Hominis Vis’ – meaning strength of man.

Persistent inflation, competition from speciality bread producers and shifting consumer habits towards lower-carb diets have combined to impair the bread industry’s financial health in recent decades.

The impact of the war in Ukraine on wheat and flour prices has been among the factors increasing inflationary pressures on bread producers, according to the most recent set of accounts for Hovis filed at Companies House last year.

The overall UK bakery market is said to be worth about £5bn in annual sales, with the equivalent of 11m loaves being sold each day.

The principal obstacle facing a merger of Allied Bakeries, which also owns the Sunblest and Allinson’s bread brands, and Hovis would reside in its consequences for competition in the UK market.

Warburtons, the family-owned business which is the largest bakery group in Britain, is estimated to have a 34% share of the branded wrapped sliced bread sector in the UK, with Hovis on 24% and Allied on 17%, according to industry insiders.

A merger of Hovis and Kingsmill would give the combined group a larger share of that segment of the market, although one source said Warburtons’ overall turnover would remain larger because of the breadth of its product range.

Nevertheless, reducing the number of major supermarket bread suppliers from three to two would be a test of the Competition and Markets Authority’s approach to such industry-reshaping mergers at a time when the watchdog is under intense government scrutiny.

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In January, the government removed the CMA chairman, Marcus Bokkerink, as part of a push to reorient Britain’s economic regulators around growth-focused objectives.

An industry insider suggested that a joint venture involving the distribution networks of Hovis and Kingsmill was a possible, although less likely, alternative to a full-blown merger of the companies.

They added that a combined group could benefit from up to £50m of cost savings from such a tie-up.

In its interim results announcement this week, ABF said the performance of Allied Bakeries had continued to struggle.

“Allied Bakeries continues to face a very challenging market,” it said.

“We are evaluating strategic options for Allied Bakeries against this backdrop and we expect to provide an update in [the second half of] 2025.”

In a separate presentation to analysts, ABF described the losses at Allied as unsustainable.

The company does not disclose details of Allied Bakeries’ financial performance.

Allied also owns Speedibake, an own-label bread manufacturer.

Hovis has been owned by Endless, a prominent investor in British businesses, since 2020, having previously been owned by Mr Kipling-maker Premier Foods and the Gores family.

At the time of the most recent takeover, High Wycombe-based Hovis employed about 2,700 people and operated eight bakery sites and its own flour mill.

Hovis’s current chief executive, Jon Jenkins, is a former boss of Allied Milling and Baking.

This weekend, ABF and Endless both declined to comment.

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Struggling Aston Martin steers into fresh pay controversy

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Struggling Aston Martin steers into fresh pay controversy

Aston Martin is steering a path towards a twin-pronged pay row with shareholders as it grapples with the impact of President Trump’s tariffs on car manufacturers.

Sky News can reveal that the influential proxy voting adviser ISS is urging investors to vote against both of Aston Martin Lagonda Global Holdings’ remuneration votes at next week’s annual general meeting.

The pay policy vote, which is binding on the company, has attracted opposition from ISS because it proposes significant increases to potential bonus awards to Adrian Hallmark, the company’s new chief executive.

“Concerns are raised regarding the increased bonus maximums, which are built upon competitively[1]positioned salary levels and do not appear appropriate given the company’s recent performance,” ISS said in a report to clients.

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Aston Martin is also facing a meaningful vote against its pay report for last year – which is on an advisory basis only – because of the salaries awarded to Mr Hallmark and other executive directors.

The company’s shares have nearly halved in the last year, and it now has a market value of little more than £660m.

Despite the ISS recommendation, Aston Martin will win the vote by virtue of chairman Lawrence Stroll’s 33% shareholding.

The luxury car manufacturer has had a torrid time as a public company and now faces the headwinds of President Trump’s tariffs blitz.

This week it said it would limit exports to the US to offset the impact of the policy.

Aston Martin did not respond to a request for comment ahead of next Wednesday’s AGM.

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Financial wellbeing platform Mintago lands £6m funding boost

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Financial wellbeing platform Mintago lands £6m funding boost

A financial wellbeing platform which counts the alcohol-free beer producer Lucky Saint among its clients has landed a £6m funding injection from a syndicate of well-known investors.

Sky News understands that Mintago, which was founded in 2019, will announce in the coming days that Guinness Ventures has jointly led the Series A round alongside Seed X Liechtenstein and Social Impact Enterprises.

Mintago, which also counts car rental firm Avis and Northumbrian Police among its customers, aims to help employees save and manage their money more effectively.

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A number of the start-up’s current investors, Love Ventures and Truesight Ventures, are also understood to have reinvested as part of the fundraising.

MINTAGO
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The company, which counts Lucky Saint and Avis among its users, has finalised a Series A funding round

The company was set up by Chieu Cao and Daniel Conti, and claims to offer more salary sacrifice schemes than any other UK provider.

It also provides independent financial advice, a service for finding lost pension pots, retail discounts and GP services.

“We realised that organisations are crying out for the same help we provide their staff,” Mr Conti said.

“The benefits of providing that support impact everyone.

“When a company improves their salary sacrifice benefits engagement, they can save thousands in National Insurance Contributions, but their employees save too, easing the strain on their finances.”

The new capital will be used to develop additional products using artificial intelligence, according to the company.

“Mintago is enabling its customers to become truly people-centric organisations by giving them the tools to support their employees’ financial wellbeing,” Mathias Jaeggi, a partner at Seed X Liechtenstein, said.

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