Daily Mail, Wednesday, August 21, 2019
Apple’s £5bn
TV streaming
service signs
up top stars
by Hannah UttleyPersimmon
profits fall
as it focuses
on repairs
PROFITS at housebuilder
Persimmon fell as it
ploughed money into fixing
problems at homes in a bid
to repair its reputation.
It raised spending on cus-
tomer service by 40pc in
the first half of the year,
pushing up annual costs by
£15m. And it is spending
£140m on repairs, after
criticism of homes riddled
with defects.
That pushed profits down
to £509m for the first six
months of 2019, 1.3pc down
on the same period a year
earlier. Some families
reported moving into new
homes with leaks, exposed
nails, doors that did not
close and loos that flushed
boiling water. In extreme
cases, houses had as many
as 700 individual faults.
Persimmon receives a
three-star rating, out of
five, in the 2018 new homes
survey from the Home
Builders Federation –
behind most competitors.
It was also at the centre
of a high-pay storm which
forced its former boss Jeff
Fairburn to resign after he
accepted a £75m bonus.
Dave Jenkinson, chief
executive, said: ‘Improving
the quality and service
delivered to our customers
remains our top priority.’
Shares fell 0.8pc, or 15.5p,
to 1846.5p.
THE female boss of vehicle website
We Buy Any Car was the best-paid
chief executive in the mid-cap FTSE
250 last year, pocketing £30m.
Avril Palmer-Baunack’s achieve-
ment was unusual, as the rankings
are usually dominated by men.
Figures from the High Pay Centre
show she is one of two women on the
list of the top ten highest-paid FTSE
250 bosses, in contrast to the all-male
list topping the blue-chip FTSE 100.
In fact, the 55-year-old mother of
two, who has since left We Buy Any
Car owner BCA Marketplace to joinvan hire company Northgate, earned
more than all of the six women who
run FTSE 100 companies combined.
Palmer-Baunack (pictured) has said
she has never experienced sexism in
her industry. But in an email ranting
about his pay, Andrew Tinkler, the
former boss of Stobart Group,
claimed he ‘might have been better
with a pair of t**s like Avril’ after she
walked out of the firm with £1.2m fol-
lowing a ten-week stint in 2013.
Emma Walmsley, at drugs firm
Glaxosmithkline, was the best-paid
FTSE 100 female boss, earning £6m.APPLE is ploughing £5bn into
television series and films as it
goes head-to-head with stream-
ing titans such as Netflix, Dis-
ney and HBO.
The iPhone maker has lined
up stars including Jennifer Ani-
ston and Reese Witherspoon for
its shows and movies on sub-
scription service Apple TV+.
Apple has been working on the
streaming service for years, and
hired two former Sony TV exec-
utives in 2017 to head it.
The firm is expected to launch
Apple TV+ by November - and
has hiked its budget for the
project from £820m to £5bn as
the war for subscriptions hots
up. This timing will pit TV+
against Disney+, which is also
set to launch in November.
TV streaming is seen as the
new frontier for media compa-
nies, with billions of pounds of
profits up for grabs and vast
sums being spent on shows.
Apple’s budget is still dwarfed
by that of Netflix, which ana-
lysts predict will set aside £12bn
for creating new series. Apple is
thought to have splurged hun-
dreds of millions of dollars aloneon one series, The Morning
Show, starring Aniston, Wither-
spoon and Steve Carell.
It is thought the project is
even more expensive than the
final series of fantasy show
Game of Thrones which report-
edly cost $12m per episode.
Further shows in the pipeline
include sci-fi drama See, star-
ring Game of Thrones actor
Jason Momoa, and a remake of
horror series Amazing Stories,
created alongside original pro-
ducer Steven Spielberg.
It is expected to charge £9.99 a
month, making it more expen-
sive than Netflix at £5.99 per
month, and Amazon, which has
a £7.99 fee for its Prime service.
Apple wants to move further
into services such as TV amid a
slowdown in sales of its iPhones,
iPads, and watches.
Revenue from iPhone sales
dropped to £21.4bn in the three
months to June 30, down 12pc
on a year earlier. Analysts pre-
dict Apple TV+ could rake in
more than 100m subscribers
over the next five years.£30M CAR SALE CHIEF IS
BEST-PAID MID CAP BOSS
N
O ONE should be fooled
into thinking companies
are reining back on bosses’
obscene rewards merely
because the annual HighPay Centre report shows the aver-
age package for FTSE 100 chief
executives fell last year.
There is no evidence whatsoever that
the drop in payouts is due to any sense
of restraint on the part of companies,
still less of any sensitivity to the disap-
proval of shareholders, customers,
employees or the wider public.
Pay packages at this level go up and down
in waves, depending on when long-term
incentive plans come to fruit.
Often, a dip one year is followed by a rise
the next, so we will have to wait and see
whether there is any real moderation. If the
past is any guide, there won’t be.
And what the annual figures ignore is the
potential for chief executives to amass seri-
ous fortunes over a few years in post.
Analysis by the Daily Mail City team this
year found there are a number of near-
£100m bosses in the FTSE 100, who have
accumulated that sum over many years at
the top. They include Rakesh Kapoor, the
departing boss of consumer goods giant
Reckitt Benckiser, who has taken home
£97.6m in eight years, despite several pro-
tests by investors. Bob Dudley at BP has
made £97.2m in nine years. Jeff Fairburn,
who quit as chief executive of housebuilder
Persimmon after investors attacked his pay,
made £93.5m in six years.
One problem is that these are managers,
not entrepreneurs. The vast riches they
have reaped do not reflect risk-taking on
their part, nor have they built up a business
from scratch.
Their pay is also far too complicated. It is
bonkers that it takes page upon page of
dense print to explain and justify the sums
going into their pockets.
The complex cornucopia of incentive
schemes and perks should be scrapped.There is no sensible reason executives can-
not be paid straightforwardly and simply,
with a generous basic salary and a bonus in
shares. They could still be very well
rewarded, and their wealth would be much
more directly tied to performance.
There is a model for this. David Stevens,
the chief executive of Admiral insurance
group, is one of the lowest paid, taking
home just over £400,000 in 2018, an absolute
pittance compared with his peers.
He makes just 15 times as much as his
average employee, compared with a ratio of
117 times to one across the FTSE 100. He
does not participate in complicated incen-
tives – he takes his salary, plus less than
£5,000 in pension payments and benefits.
He does, however, have a large sharehold-
ing, worth nearly £200m as at the end of last
year, accumulated since he co-founded
Admiral in the 90s. It has grown as the busi-
ness expanded to a £6.3bn behemoth.
We shouldn’t begrudge rewards for entre-
preneurial success, but too many compa-
nies shower managers with unwarranted
largesse. Investors should stop pussyfoot-
ing and demand a complete overhaul.Jeff’s legacy
IT SEEMS a fitting coincidence that the
high pay report came out on the same day
Persimmon issued its half-year results,which bore the scars from the reign of the
scandalously over-bonused Jeff Fairburn.
Profits fell as the housebuilder has had to
improve its customer service and slow down
the sale of homes so buyers were not mov-
ing into hurriedly-constructed homes.
A culture of avarice and arrogance dam-
aged Persimmon and that has to change.
Hold on though. The new boss, Dave
Jenkinson, was a Fairburn henchman and a
big beneficiary of the same incentive scheme
that enraged shareholders when Jeff filled
his boots. In 2017 and 2018, Jenkinson made
£45m and bought a pub. Is he the ideal per-
son to usher in a new greed-free culture?Sub-prime
DOORSTEP lending, where poor borrowers
are sometimes charged interest of more
than 1,000pc, is a distasteful business.
But it has been a lucrative one for the
bankers, lawyers and PR advisers who
cashed in on the failed bid by Non-Stand-
ard Finance for Provident Financial.
NSF took a near £13m charge for the costs
of its takeover attempt, whilst it cost the
Provvy more than £23m to defend itself.
Shares in the two companies – both held
by discredited fund manager Neil Wood-
ford, who pushed the dubious merger – have
more or less halved in value.
A plague on all their houses.Top pay needs total revamp
Green backs Mysale
TOPSHOP tycoon Sir
Philip Green has put
£2.2m into struggling
online retailer Mysale,
as it shelved its search
for a buyer.
Mysale, which sells
designer brands at a
discount, had sought a
buyer after announcing
a 35pc fall in half-year
profits. Instead, it
raised £11.2m by selling
561m new shares to
existing investors at 2p
each. Shelton Capital,
headed by Green’s wife
Tina, bought £2.2m
worth of shares and
now owns 20pc.
Schroders bought
£1.8m of stock, taking
its stake to 16pc.
The company will use
the cash to pay down
all of its £5.5m debt.DIRECTOR’S DEALS
Alon Gonen, 42
Co-founder, Plus 500ONE of the
co-founders
of online
trading firm
Plus 500 has
spent £1.7m
on stock as he contin-
ues a buying spree.
Israeli tech guru
Alon Gonen, 42, picked
up nearly 235,000
shares at an averageprice of 710p on Friday.
This is on top of £10m
of stock he bought
earlier in the week.
The purchases follow
a 48pc fall in Plus 500’s
share price this year,amid a crackdown by
regulators. However,
they are small fry
compared with the
£110m of Plus 500 stock
which Gonen sold late
last year.Asos price demand
ONLINE fashion firm
Asos has asked its sup-
pliers for a 3pc discount
on the clothes and
accessories it buys, as it
struggles to shore up
its finances following a
double profit warning.
Its shares have tum-
bled 62pc over the past
year after it blamed a
shake-up at warehouses
for pushing predictedprofits down by as
much as £72m com-
pared to last year.
Just four months after
chief financial officer
Mathew Dunn joined,
Asos is asking for a dis-
count from the begin-
ning of September.
Outraged businesses
said it was the first time
an online-only firm had
asked for lower prices.Page 67Ruth
Sunderland
BUSINESS EDITOR