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Standard Life, the Edinburgh-based insurer, has been conducting a “global search” for the right person to be its new chief executive for something like a year. Yesterday, it announced that it has found the very man: he's from Glasgow.
All due congratulations to David Nish for his promotion from finance director to top dog, but it has to be said that his appointment prompts at least as many succession questions as it answers.
For one thing, Standard now needs a new finance boss.
The global search is under way. Accountants from Dundee look favourite. Of more immediate concern may be the future of Keith Skeoch, the chief executive of Standard Life Investments, the fund management arm.
Skeoch was definitely one of the front-runners for the chief executive's job, an ambitious man who prospered during the financial crisis.
How he feels about working for Nish is not clear, but it certainly seems fair to speculate that if he were offered a lucrative position elsewhere in the fund management world, he'd be interested. Headhunters, start your calls now.
Moreover, the company has still not replaced Trevor Matthews, the well-respected head of the UK business who decamped to lead Friends Provident.
If Skeoch did decide to move on, that would leave Standard Life searching for three new top executives just as Nish grabs control (he takes over from company stalwart Sir Sandy Crombie in January).
Such a shake-up might make it difficult for Standard to insist that its steady-as-she-goes strategy remains in place. Crombie took delight lately in being “reassuringly dull”. He leaves Standard Life in a position of financial strength that compares well with rivals.
The City is not expecting any sudden lurches in unusual directions, certainly not from Nish, who has a track record in that area.
Two years ago, Standard Life was insisting to analysts and investors that it was pursuing an “organic” growth strategy. Fancy takeover deals weren't on the agenda.
Then it launched a near-£5 billion bid for Clive Cowdery's Resolution Life, throwing this strategy into chaos and leaving analysts wondering what else they didn't know about the company.
Nish is perceived to have been the driving force behind the Resolution bid. On the roadshows to promote the offer, Crombie let Nish do most of the talking, say those who were there.
Presumably, that deal having failed, Nish won't be keen to get involved in M&A again any time soon on the once-bitten, twice-shy basis.
But he could be vulnerable to a bid. Cowdery's new takeover vehicle, also called Resolution, is sniffing around.
If Nish was up for it before, what would be his basis for saying “no” this time? Asked about Nish's performance of late, one sector watcher said: “He inherited a strong balance sheet and did not muck it up. He had a good bear market in that no one sensible thought Standard Life was going bust, which they did last time around.”
So, he's a solid choice, although the word on the street is that he may not have been the first one.
My informant reckons that Nick Prettejohn, until recently head of Prudential's UK business, and Patrick Snowball, formerly of Aviva, were approached. Their reasons for turning the job down are not known.
But then, as the global search committee found, it is easier to get Scottish people to live in Scotland.
New attack that's difficult to swallow for the pubcos
AS if life wasn't hard enough for the big pub companies, along comes the Royal Institution of Chartered Surveyors to make it worse.
A brawl between Enterprise Inns and Punch Taverns — the biggest UK landlords — and the publicans who rent pubs and buy beer from them has been getting fruitier all year.
The small landlords say they are grievously overcharged by pubcos that have no interest in overseeing good boozers and are happy to see one tenant go out of business on the basis that another sucker will turn up before too long.
The pubco bosses, Ted Tuppen and Giles Thorley, say “cobblers”. They signed up to a fair contract, which they should honour, and when they get into trouble, we give them plenty of aid. When we put rents up, we do so with regret and with fairness, they argue.
The RICS braved the beer bottles flying overhead to do its own inquiry, and has bad news for the big boys: the rent review process is “imbalanced” in favour of the pubcos and would not be allowed if pub tenants were protected by law in the same way as consumers.
Ding ding. Round 87.
Under-pressure Goldman feels the need to talk tax
The Goldman Sachs PR machine, prostrate on the canvas in recent months, got back into the game last week.
As the bank unveiled its latest round of crisis-defying profits (half of which it intends to give to staff), it made unusual noises about tax.
In general, investment banks don't like to get into the grubby business of how much they pay into government coffers. (The usual assumption being because they don't pay that much once the tax-dodging accountants have got to work.)
It's a sign of how under pressure Goldman has felt of late that it was suggesting that this year's profits and bonus payments could be worth £2.5 billion to the Treasury. The maths goes roughly like this: Goldman paid £1.1 billion in UK corporation tax last year — so this year's should be similar.
Assuming the £14 billion global pay pot guesstimate is right, that's about £1 billion at the 40% tax rate for the 5500 UK staff. Then chuck in National Insurance and VAT to get to the £2.5 billion.
Hopefully, someone at the Treasury is keeping a close eye on the eventual payments to check that the amount received is close to Goldman's boasts.
The Treasury should publish an annual league table of the 50 leading corporate contributors. These supposedly competitive entities might even compete to be on top.
