Dozens Remain In Millionaires' Ranks At RBS

By Mark Kleinman, City Editor

The state-backed Royal Bank of Scotland (RBS) will disclose on Friday that it paid dozens of employees at least £1m last year, just days after reporting a £3.5bn annual loss.

Sky News understands that the lender will publish figures showing that the number of staff earning more than the £1m sum fell only marginally from 75 individuals a year earlier.

The disclosure will be awkward for RBS despite the fact that its overall bonus pool fell by more than 20% in 2014, and a decision by its chief executive to waive a £1m share allowance.

The bank will include the number of millionaires in its remuneration report, which is also expected to confirm a six-figure payout to Stephen Hester, its former boss, under a long-term incentive plan.

For the first time, RBS will denominate the number of millionaire staff in Euros, in order to comply with guidelines set by the European banking watchdog.

A source familiar with the figures said that when calculated in sterling, the decline in the number of millionaires would be "modest".

Last week, RBS said it had made a loss for the seventh consecutive year since being bailed out with more than £45bn of taxpayers' money.

The performance prompted Ross McEwan, its chief executive, to forego a £1m payment, which he said would have distracted from  to avoid distracting from "the task of building a great bank for customers and shareholders".

This week, the European Banking Authority cast renewed doubt on the ability of banks to continue awarding those payments.

RBS has been plagued by remuneration rows since its rescue in 2008, and was last year prevented by the Treasury from making variable pay awards on the same basis as commercial rivals.

Sky News revealed last month that RBS and Lloyds Banking Group would restrict cash bonuses to £2000 for a further year.

RBS has also decided that it will no longer pay annual bonuses to any members of its executive committee in a permanent decision cast by some City investors as endangering RBS's ability to compete for talent.

Mr McEwan and other top executives remain eligible for share awards under RBS's long-term incentive plan, which in the chief executive's case can have a maximum value at award of £2m.

Last week's results dashed hopes of a return to profit after a £4bn writedown of goodwill relating to Citizens, RBS's US bank.

Mr McEwan also announced further measures to improve the performance of its corporate and investment bank, including "substantial" job cuts which reports this week suggested could account for as many as 80% of the 16,000 positions within the division.

The decision marked another nail in the coffin of RBS's attempts to build a global investment bank, drawn up under Fred Goodwin, its former boss.

RBS also confirmed the appointment of Sir Howard Davies as its new chairman, replacing Sir Philip Hampton.

The bank declined to comment on Thursday on its remuneration report.

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Osborne 'Regrets' Lack Of Radical RBS Reform

The Chancellor has admitted he regrets not beginning a radical restructuring of Royal Bank of Scotland (RBS) following the last General Election.

George Osborne also told the Financial Times he would look to "get rid of" the taxpayer's "massive" 80% stake following the coming election, should he remain in the post, but warned the process may take many years.

He said: "First, it's not an exact science but on some measures it's bigger than all the privastisations of the 1980s put together.

"Second, I think people want to get their money back. The British taxpayer wants to feel they haven't suffered some enormous loss.

"So there are constraints around it but it's certainly something I would want to get moving on in the summer after the election."

Video: RBS Boss Dismisses Job Cull Figure

One option Mr Osborne ultimately ignored was a recommendation to break-up RBS - favoured by the business secretary, Vince Cable in 2012.

In 2013, RBS created its own so-called 'bad bank' to hold billions of pounds of its most risky assets.

Mr Osborne was instrumental in determining the bank's new focus on UK retail and corporate banking, having overseen the departure of chief executive Stephen Hester in favour of Ross McEwan.

Mr McEwan told Sky News earlier this week he would not put a number on an FT report that the bank was planning to shed 14,000 of its 18,000 investment banking jobs as it moves to shrink operations in the US and Asia.

The Chancellor's efforts to sell-off the Government's stake in RBS may be hampered by its share price.

It is currently trading at 377p per share, well short of the 455p average needed to recover the £45bn spent propping up the bank in 2008.

Any Government would be under pressure to secure a profit for the taxpayer - something which has been achieved so far with the slow disposal of Lloyds shares.

The bank revealed last week it remained loss-making in 2014 and Sky News has learned its remuneration report, due to be released later on Friday, will show it continues to pay dozens of staff more than £1m annually.

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Apple To Trade On Dow Jones After Stock Split

Apple is to replace AT&T on the Dow Jones Industrial Average this month.

The technology firm, which has become the largest company in the US by market value, had previously been prevented from joining the top 30 listed companies in the Dow because its stock price was too high for the price-weighted index.

S&P Dow Jones Indices said the seven-for-one stock split that Apple carried out in June allowed it to make the step up from the tech-heavy Nasdaq.

Apple has a current market value of almost $740bn.

Telecoms firm AT&T is currently worth $177bn.

The iPhone and iPad maker will make the switch on 18 March.

The change was prompted by a four-for-one stock split for Dow-member Visa.

S&P Dow Jones Indices said the post-split adjusted lower price of Visa will reduce its weighting in the information technology sector of the index.

Adding Apple will help to partially offset this reduction.

AT&T has had two stints in the Dow having last been removed in 2004.

After SBC Communications renamed itself AT&T following a 2005 merger, it was reinstated in the index.

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Vodafone Launches Global Maternity Pay Deal

Vodafone is introducing a worldwide minimum level of maternity pay in an effort to better support and retain more new mums.

The communications firm said It was to offer women 16 weeks of fully-paid maternity leave, plus full pay for a 30-hour week for the first six months after their return to work.

Vodafone, which employs around 100,000 people in 30 operating companies across Africa, the Middle East, Asia, Europe and the US, said the policy would be in place by the end of 2015.

It was aimed particulalry, the company said, at more than 1,000 female employees every year who work for it in countries with little or no statutory maternity care.

Chief executive Vittorio Colao said: "Too many talented women leave working life because they face a difficult choice between either caring for a newborn baby or maintaining their careers.

"Women account for 35% of our employees worldwide, but only 21% of our international senior leadership team. We believe our new maternity policy will play an important role in helping to bridge that gap.

"Supporting working mothers at all levels of our organisation will ultimately result in better decisions, a better culture and a deeper understanding of our customers' needs."

Its policy was inspired by research is commissioned showing that global businesses could save a combined £12.5bn annually by providing 16 weeks of fully-paid maternity leave.

It found recruiting and training new employees to replace women who leave the workforce after having a baby costs almost £31bn.

The group already offers a greater number of weeks of full pay to women on maternity leave in the UK and this will not be affected as the new policy offers a minimum rather than standardising terms across the world.

UK rules grant employees statutory maternity pay for up to 39 weeks, with 90% of average weekly earnings for the first six weeks, and the lower of £138.18 or 90% of earnings for the remaining 33 weeks.

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Big Firms Forced To Reveal Gender Pay Gap

Thousands of large companies will be forced to share details of the difference between what they pay their male and female workers.

The Government has agreed to implement the Liberal Democrat measure despite years of Tory opposition to it.

The move will mean companies employing more than 250 people will be required to publish the gap between average pay for their male and female workers.

More than 10 million people across the UK are currently working at firms covered by the legislation.

The current approach, which is voluntary, has seen only five out of around 7,000 large companies publish their gender pay gap.

Video: Dec: Gender Pay Gap

The new measure, which will come into force within 12 months, could result in fines of up to £5,000 for firms that do not reveal the details.

Equalities Minister Jo Swinson said she was "delighted" her party won the "argument in Government".

She said the move "will force companies to ask themselves difficult questions about how they are valuing the contribution of women in their workforce and act to address problems".

Deputy Prime Minister Nick Clegg said: "These measures will shine a light on a company's policy so that women can rightly challenge their employer where they are not being properly valued and rewarded."

The legislation will be debated in the Lords on Wednesday, with the Government tabling an amendment to the Small Business Bill.

A Government spokesman said: "Under this Government the gender pay gap is the lowest ever and has virtually been eliminated for those working full time under 40.

"However the pay gap persists, so we think it's time to move forward, so we can create the conditions to ensure that there is equality in workplaces across the country."

Video: Dec: Gemma Arterton On Equal Pay

Shadow equalities minister Gloria De Piero said: "This is fantastic news for women but why have they waited so long?

"The reality is that it's only when the Government realised they would be defeated on this issue by Labour in the House of Lords that they saw the need to act."

The move comes as the head of the UN agency promoting equality for women said not a single country has reached gender parity.

UN Women executive director Phumzile Mlambo-Ngcuka made the comments 20 years after a groundbreaking conference in Beijing where 189 nations adopted a blueprint to achieve equality for women.

Ms Mlambo-Ngcuka said that although progress had been made since Beijing, there are still fewer than 20 female heads of state and government.

She said the number of female politicians increased from 11% to just 22% in the past 20 years.

Ms Mlambo-Ngcuka also said "the sheer scale of the use of rape that we've seen post-Beijing", especially in conflict situations, "tells us that the women's bodies are viewed not as something to respect, but as something that men have the right to control and to abuse."

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Club Med Owner Takes 5% Thomas Cook Stake

The new Chinese owner of Club Med has taken a 5% stake in Thomas Cook to begin a "strategic partnership".

The investment by Fosun, which bought French resort firm Club Med only weeks ago, is aimed at giving both Fosun and Thomas Cook access to new markets - with Thomas Cook hoping for access to China's growing tourism sector in the "medium term".

Its share price rose 16% in early trading in the wake of the announcement.

Fosun told the Hong Kong stock exchange it paid £91.9m for the shares and said it would seek to double its holding in Thomas Cook, the world's oldest travel group, to 10% with purchases on the open market. 

The deal could help Fosun promote holiday packages at Club Mediterranee SA, which is widely known as Club Med, as it looks to turn around the firm's struggling business in Europe.

"The investment in Thomas Cook complements other recent investments of the group in the sector, providing opportunities for further value creation," Fosun chairman Guo Guangchang said.

Thomas Cook, which lost its chief executive Harriet Green late last year, remains in the middle of a cost-saving plan but aims to grow this year despite also facing tough trading conditions in mainland Europe.

New chief executive Peter Fankhauser said: "Our partnership with Fosun is aimed at accelerating our profitable growth strategy by allowing us to further develop our differentiated product in our core destination markets, to collaborate with Fosun's other portfolio businesses particularly in France, and to access the world's largest and fastest-growing tourism markets with an experienced local partner.

"We are looking forward to working closely with Fosun's team to execute the commercial opportunities we are developing."

Thomas Cook's statement said it expected the tie-up to be earnings accretive in the financial year ended 30 September 2016, assuming plans under the partnership were implemented in 2015.

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New FA Boss Is Wolves Fan With Snack Background

The Football Association (FA) has appointed the boss of United Biscuits, Martin Glenn, to the role of chief executive.

The 54-year old will take up the role in May.

The FA described him as a "veteran of industry" who had "built up a reputation for making well-loved British brands more dynamic, competitive and international in their reach".

Its statement said: "He came to prominence during his time at Walkers Snack Foods in 1992, enlisting England's second greatest goal scorer of all time, Gary Lineker, to play a key promotional role in his marketing campaigns".

The news release contained a wealth of detail on his business and sporting background, confirming he was a Wolverhampton Wanderers supporter.

It said: "An FA qualified grassroots coach, Glenn is also a former Leicester City FC non-executive Director, having sat on the Club's Board between 2002-2006.

Mr Glenn said: "I am incredibly proud to have been chosen to play my part in shaping the future direction of The FA.

"There are few more important and interesting places to work than Wembley Stadium and St George's Park and I am very much looking forward to meeting the staff and leading them into an exciting new period.

"I have coached football at grassroots level, have sat on the Board of a Premier League football club and have spent my time on the terraces at Molineux where I have a season ticket.

"I hope this informs my work at The FA as we look to inspire everyone to be involved in what is the nation's most watched and played team sport.

"I very much hope my personal experience of operating in highly competitive global markets will help The FA in its own drive to promote greater success for our all of our national teams in international tournaments."

The FA chairman, Greg Dyke, added: "On behalf of The FA Board I am delighted with the appointment of Martin Glenn as chief executive officer of the Football Association.

"He brings with him a wealth of experience as a CEO to what is an extremely important role in English football, and he will play a key part in helping us shape and deliver our new strategic priorities for the years ahead.

"I know, as a football fan, he will take great pride in the job and he will be an asset to The FA and will lead the organisation through a significant period of change.

"Martin came through a highly competitive process, and we are delighted that he has chosen to join us. He is a natural leader and I look forward to working with him."

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US Jobless Rate Tumbles To 5.5% In February

The US jobless rate plunged last month as hiring accelerated, raising expectations of a possible interest rate rise by the Federal Reserve.

The world's biggest economy created 295,000 net new jobs in February, despite some severe weather disruption and mounting layoffs in the oil industry because of recent price weaknesses, the Labour Department reported.

The unemployment rate was down to 5.5% from 5.7% in January - its lowest since May 2008.

The data meant that 3.3 million more Americans have taken jobs over the past 12 months.

Separate Commerce Department data also contained good news with the US trade deficit falling to $41.8bn in January as imports declined more than exports.

Financial markets expect the Fed to raise rates this summer and the payroll report will have done little to dampen that forecast.

The dollar, which is at 12-year highs against the euro, gained further ground though stocks barely moved amid the frenzy over rate rise speculation.

However, wage growth - a key metric eyed by the Fed - among the workers of private firms was just 0.1% last month.

It may be that Fed chair Janet Yellen would want to see a stronger rally in salaries before imposing increases in borrowing costs.

The report showed average hourly wages rose just three cents from January - 2% up on a year ago.

Hiring was strong in restaurants, health care and administrative services.

The oil and gas industry, just beginning to cut back in the face of the crash of crude prices, shed about 8,500 jobs.

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Purplebricks Eyes Latest UK Tech Flotation

By Mark Kleinman, City Editor

One of the UK's fastest-growing online estate agents is drawing up plans for a stock market listing that would provide capital for an aggressive assault on established high street rivals.

Sky News has learnt that Purplebricks, which counts the City's best-known fund manager among its shareholders, has been talking to investment banks in recent weeks about working on a flotation.

The company is understood to be planning to hire advisers imminently, sources said on Friday.

The business is among a new breed of digitally-led estate agents which are attempting to bring a similar level of customer experience to industries such as holiday bookings and grocery shopping, which have been revolutionised by online competitors.

Purplebricks was set up less than a year ago, and now has backing from Neil Woodford, the former Invesco Perpetual fund manager, who set up his own asset management venture last year.

Mr Woodford invested £7m in Purplebricks, which enables home-owners to sell their properties for a flat fee of £599, compared to an average sum paid to estate agents of more than £5000 based on the typical commission of 1.8% of a property's value.

Purplebricks also offers a service to landlords, offering a tenant-finding service for a one-off fee of £199.

Its other backers are reported to include Errol Damelin, the former boss of payday lender Wonga, and Paul Pindar, former boss of Capita, the outsourcer.

Last autumn, Mr Woodford was quoted as saying that that the company had "the vision, the technology and an experienced management team. With the funding at its disposal, I see a significant opportunity for the business to lead the market in changing the way we buy and sell houses.

"Given that the vast majority of property searches take place on the Internet, a business that provides a 'virtual' offering without expensive high street offices can significantly undercut the current market." 

Founded by brothers Michael and Kenny Bruce, who ran the estate agent Burchell Edwards before its sale in 2011, Purplebricks is far from the only new entrant to the market.

Sir Charles Dunstone, the co-founder of Carphone Warehouse, recently ploughed millions of pounds into HouseSimple, while the easyJet founder Sir Stelios Haji-Ioannou, has launched a site called easyProperty.

The emerging online players have tried to add value to the property-selling process by allowing customers to personalise the services they use while charging lower fees than high street peers.

A number of estate agents have listed on the stock market in recent years, including Foxtons, the hard-charging firm known for its distinctive fleet of cars, and Zoopla Property Group.

A Purplebricks spokesman declined to comment.

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US Group Whitewave Has Appetite For Quorn

By Mark Kleinman, City Editor

The owner of Quorn, the meat-free food producer, ‎is mulling a sale of the business to the American group which owns Alpro, the plant-based milk alternative.

Sky News understands that The WhiteWave Foods Company has held initial discussions with Exponent Private Equity, which has owned Quorn since 2011.

The talks are highly preliminary and may not lead to a formal offer from WhiteWave or a deal, a source said.

Contact between the two companies comes as Exponent has been preparing an auction of Quorn that could value it at more than £400m.

The private equity firm held a beauty parade of investment banks several weeks ago but has not yet formally appointed one.

Based in North Yorkshire, Quorn has capitalised on growing consumer demand in some western markets for diets containing less red meat‎ amid public health statistics highlighting an explosion in levels of obesity.

In January, the company published figures showing that sales had risen by 7% in 2014 to  £150m,  bucking a trend of flat sales performances from many of its competitors.

Quorn's stronger sales were due in part to a deal with Wal-Mart, the world's largest retailer‎, which now stocks its products in more than 2,000 stores.

The horsemeat scandal in 2013 stoked concerns about food provenance, boosting the manufacturers of non-meat ranges.

Its foothold in the US market is likely to appeal to prospective buyers such as WhiteWave.

Last month, the American company reported record results for last year, with revenue and profit both rising by more than 30%.

WhiteWave is one of the biggest producers of plant-based foods, with brands such as Earthbound Farm, Silk and Alpro.

Even if WhiteWave does pursue a formal‎ offer for Quorn, it is unlikely to be the only bidder.

Hain Celestial, which has acquired British brands such as Covent Garden Soups in recent years, and Nestle, the Swiss giant which owns Kit-Kat and other confectionery products, are both being tipped to show interest.

Quorn's origins date back almost 50 years, although the brand itself was created in 1985.

It has had a string of owners, including Zeneca, the pharmaceuticals group, and Premier Foods, which sold the brand for £205m as it raised cash to stave off the threat of collapse.

Kevin Brennan, Quorn's chief executive, has vowed in the past to turn it into a billion-dollar brand.

Quorn is not the only British-based food brand on the market.

Sky News understands that the founders of Natural Balance, which produces the Nak'd range of cereal bars, have hired Stamford Partners, an advisory firm, to seek an outside investor.

They are said to be targeting a valuation for their business of roughly £50m.

WhiteWave, Exponent and Stamford Partners declined to comment.

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