Martin Vander Weyer

The FTSE100 index stands precisely where it did in the first week of December 1999. Whichever way you look at it, shareholders — including pension funds — have had a rotten run on the economic rollercoaster of the past 15 years. So it’s reasonable to keep asking whether the rise in executive pay over that same period is justified: a report from the High Pay Centre says remuneration of the average FTSE100 chief executive is now at a multiple of 143 times that of the average worker in the same companies. In 1998 that multiple was 47, indicating a tripling of top pay relative to workforce earnings while shareholder returns have stayed flat. Of course this argument is not that simple.

The FTSE100 index stands precisely where it did in the first week of December 1999. Whichever way you look at it, shareholders — including pension funds — have had a rotten run on the economic rollercoaster of the past 15 years. So it’s reasonable to keep asking whether the rise in executive pay over that same period is justified: a report from the High Pay Centre says remuneration of the average FTSE100 chief executive is now at a multiple of 130 times (corrected from the report's original figure of 143 times) that of the average worker in the same companies. In 1998 that multiple was 47, indicating that top pay has almost tripled relative to workforce earnings while shareholder returns have stayed flat. Of course this argument is not that simple.

August is the season for conversation about career choices. Every holiday party seems to include new graduates or next year’s graduands in need of grown-up advice. Many yearn to be pastry chefs, having devoted their student years to watching The Great British Bake Off. Some want to be journalists, and I tell them it’s more fun than having a secure job with a decent income. Happily I’ve only met one young man this summer who wants to go into financial PR, the métier in which I believe Satan himself did his first internship.

Iain Conn, who will succeed Sam Laidlaw as chief executive of Centrica, would have been a dead cert for the top job at his current employer, BP, were it not for the Deepwater Horizon oil rig disaster in the Gulf of Mexico in April 2010. The subsequent PR fiasco terminated the BP career of the then chief executive Tony Hayward — who seemed crushed by the episode, but recovered to make a double fortune at Genel Energy and Glencore. Had Hayward served a full term, Conn (BP’s head of refining and marketing) would almost certainly have followed him. As it was, BP found it more politic to appoint an American, Bob Dudley, to repair relations in Washington while simultaneously arm-wrestling with the Kremlin-connected oligarchs who were BP’s co-investors in Russia.

‘Sanctions,’ said Kofi Annan, ‘are a necessary middle ground between war and words.’ Neither the EU nor the US will deploy troops or missiles to defend Ukraine against Russian-backed separatists, while Vladimir Putin basks in hostile Western words and turns them to domestic advantage. That leaves sanctions as the only means of seeking to influence him. But do they work? Evidence is not persuasive: in 200 cases studied by academics in Washington, from the League of Nations action against Italy’s aggression in Abyssinia in the mid-1930s to Russia’s assault on Georgia in 2008, sanctions were judged successful in one third of cases; in many of those, success was ‘partial’.

Lloyds Banking Group is to pay fines of £218 million for fixing interest rates including Libor (the rate at which banks lend to one another) the Financial Conduct Authority and US Commodities and Futures Trading Commission have announced. The FCA described the behaviour as ‘serious misconduct’, and Bank of England Governor Mark Carney said the rigging was ‘reprehensible’. Lloyds follows in the footsteps of Barclays and RBS which have also been fined for market manipulation. But should the banks be punished for their transgressions? In February, The Spectator's business editor, Martin Vander Weyer, asked whether fines might weaken the banks we want strengthened, and whether they might hit us rather than the banks.

I really wouldn’t want to be chief executive of Tesco, I wrote in January, because the ‘too big, too dull, too dominant’ supermarket giant, besieged by discounters, has become ‘a business-school case study of a brand that has lost all positive emotional connection to its customers’; the incumbent Philip Clarke, a Tesco lifer with scant hope of measuring up to his predecessor Sir Terry Leahy, had ‘everything to lose’. Well, now he’s lost it — to be replaced by Dave Lewis, a Unilever executive who knows how to turn dull products into sexy brands, Dove soap and Lynx deodorant being two of his triumphs.

There isn’t a single item of Burberry in my wardrobe, I’m afraid, so I was unaware until this week of the fashion genius that is the firm’s chief executive Christopher Bailey, whose £20 million pay deal received a thumbs-down from 53 per cent of shareholders at last week’s AGM. The vote was not binding on the board, however, so Bailey — the Halifax-born carpenter’s son who, I now know, reinvented the trench coat and rescued the classic Burberry check from the chavs who adopted it a decade ago — will get his giant share award anyway. But does he really deserve it?

Is the housing market really starting to cool, or is the heat moving to unexpected places? The number of mortgage approvals in May was down almost a fifth from a peak at the beginning of the year — reflecting tougher affordability tests and slower processing as a result of the Mortgage Market Review in April, as well as fears of interest rate rises. Bank of England restrictions on high-risk lending announced this week will add to the dampening. Meanwhile, at the top end — the market for £10 million-plus London ‘super-prime’ properties — foreign buyers are reported by Knight Frank to be in retreat, deterred by the strength of sterling.

It was at the Mansion House dinner last year that a City gent two seats away announced himself to be the custodian of one of London’s ‘dark pools’. The phrase sounded pleasingly Tolkienian but his first explanation — an electronic exchange in which large share transactions are completed in total privacy — dispelled the charm. My reaction was sharp enough to make the Downing Street spin-doctor between us fiddle nervously with his Twitter feed. If institutional investors can shift blocks of stock on the quiet, without moving public markets, what happens to the normal process of ‘price discovery’ between buyers and sellers? Surely small investors are being ripped off? Sounds like another market abuse to me, I shot along the table.

‘Iraq turmoil sends crude oil prices to nine-month high’ is the sort of headline that used to send shivers down economists’ spines, especially if it appeared on the same page as ‘Europe faces gas shortage as Russia cuts Ukraine supply’. How worried should we be at the current turn of events in the energy world? Since Iraq’s new insurgency kicked off, the price of a barrel of Brent Crude has blipped from $105 to $115 — nothing to panic about — but the more pessimistic analysts are talking of a further $30 rise if Iraqi oil flows of 3.6 million barrels a day (representing about 4 per cent of global demand) are seriously disrupted.