Commentaries
Now raising intellectual capital
Why is RBS’s boss selling its shares?
Controversy and running RBS go hand in hand. Stephen Hester replaced Fred Goodwin as chief executive of RBS and is now in hot water himself over his incentive pay deal. The chief executive of the state-controlled bank could be paid 9.6 million pounds over three years if the share price (currently 44p) reaches 70p. However, he seems to have so little faith in the shares reaching that level that he has offloaded 1,264,565 shares since last November at prices between 28.5p and 48p, yielding just over 464,000 pounds.
When unveiling first half results last week Hester asserted that “We have a strong plan in place that I believe can get us to where we need to be by 2013,” which presumably includes recovery in a share price still languishing more than 90 percent off its peak.
The official guff goes that Hester was granted shares, in tranches, when he joined RBS in lieu of those he would have received at British Land. Under British tax law, the awards are treated as income and so Hester sold some of the shares granted “to meet an immediate income tax and national insurance liability.”
In doing so, Hester can claim to be following best financial practice in matching a liability with the corresponding asset. Finance theory also says that investors should not put all their eggs in one basket.
Tax-happy French eye carbon tax
Cynics say the French never saw a market they didn’t want to regulate, or an economic activity they didn’t want to tax. Now this levy-happy nation, with one of the highest fiscal burdens in the world, is eying a new target for taxation: carbon. And in this case, they may just be right.
Former Prime Minister Michel Rocard, a moderate Socialist commissioned by conservative President Nicolas Sarkozy, will present a report on Friday calling for a carbon tax on fossil fuels used in transport and heating (hat tip Les Echos). Speaking on France Inter radio, Rocard confirmed the broad outlines of his complex proposal, which would return some of the proceeds of the “Climate Energy Contribution” in a “temporary and partial” payment to poor households, the elderly and people living in remote areas who are dependent on their cars. The goal would be to preserve the “price signal” needed to change consumer behaviour and reduce emissions of carbon dioxide, the greenhouse gas most blamed for global warming.
from Neil Collins:
A tall story about taxation
I can't decide whether this is an elegant spoof or a serious piece of academic research. At first sight, the answer's obvious, since it starts thus:
"Should the income tax system include a tax credit for short taxpayers and a tax surcharge for tall ones?"
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The Wall
