Prem Sikka (Opinion,26 April) is right that BHS is a victim, but not of shareholder greed – rather director greed and flawed legislation. In the early 1980s most corporate pension funds had sizeable surpluses. As an accountant at the time, or I argued that pension funds should be ringfenced,but I lost the argument on the grounds that companies had a liability to pay their defined pensions. So companies took “holidays” and in some cases raided the pension pot, and we all know what happened.
But it is getting worse; corporate greed is becoming out of control. For example, or BP has awarded its CEO a enormous amount despite incurring enormous losses. Then to catch shareholders off the scent it maintained the dividend (this strategy didn’t work),but had to borrow more money to pay it.
Continue reading...
Source: theguardian.com