Welcome to BitBeat, your daily dose of crypto-current events, written by Paul Vigna and Michael J. Casey.
Bitcoin Latest Price: $491.07, up 0.9% (via CoinDesk)Crossing Our Desk:
–An unorthodox fund-raising drive by digital currency startup Maidsafe offers evidence of the bitcoin community’s enthusiasm for so-called “Bitcoin 2.0” applications.
Maidsafe, which vows to “decentralize the Internet,” says it raised the equivalent of $6 million in just five hours by selling its “safecoins” via a first-round crowd-funding operation.
Maidsafe press representatives claim the $6 million figure makes this the most successful crowd-funding in history, beating out ventures that have used sites such as KickStarter to lure investors to fund projects for everything from film making to computer games.
Apples-to-oranges comparisons complicate that claim. A couple of prior projects have raised more than $8 million via Kickstarter, but those took place over a month. Maidsafe’s initial offering took just five hours.
Another wrinkle: complications over the exchange rates for the two digital currencies used in the fund raising forced the Maidsafe founders to personally buyback newly issued safecoins and reissue them so some burned speculators weren’t left out.
Their effort to make whole the burned investors has mostly been welcomed by bitcoiners – even if a few complained of being duped by an elaborate “pump and dump” scheme. The consensus is that Maidsafe was just overwhelmed by the unexpected demand for their concept.
The biggest takeaway then is that these Bitcoin 2.0 ideas are hot.
Another one, called Ethereum, will use its own internal currency and decentralized network verification system to allow programmers to produce specialized applications that also remove middlemen from all sorts of human interactions. According to its website, it foresees automated markets in areas as diverse as voting, domain names and intellectual-property contracts.
Other Bitcoin 2.0 outfits include Bitshares, which will help innovators found entirely decentralized, software-automated companies that pay out earnings to shareholders in their own currency-like “bit-shares,” and Permacredits, which issues tokens under rules established by another decentralized network so as to reward and incentivize investments in permaculture projects. (Michael Casey)
–Demystifying digital currency was a clear intent of “The Rise and Rise of Bitcoin,” which opened at New York’s Tribeca Film Festival Wednesday night.
By that gauge, Daniel Mross’s night was made by a security guard at the School of Visual Arts Theater on 23rd St. The narrator of the documentary, whose bitcoin obsessions caught the attention of his filmmaker brother, Nicholas, says the guard stopped him after the show and said, “This was a great film. I had no idea about all this. How can I get some bitcoin? If I work as a security guard, can you pay me with bitcoin?” (Michael Casey)In the News:
- There are now more than 60,000 businesses that accept bitcoin, according to the latest “State of Bitcoin” report from CoinDesk. At the same time, VC continues to pour into the space. On the other hand, bitcoin prices were down 37% in the first quarter.
Market Snap: At the New York close: S&P 500 up 0.2% at 1878.61. DJIA unchanged (up 0.002 point) at 16501.65. Nasdaq Comp up 0.5% at 4148.34. Treasury yields flat; 10-year at 2.686%. Nymex crude oil up 0.5% at $101.94. Gold up 0.5% at $1,290.50/ounce.
How We Got Here: U.S. stocks waffled around quite a bit, although they were green at the closing bell. The vacillating was evident in shares of Facebook, which opened lower even after Wednesday’s good earnings report, moved back into the green during the session, only to close 0.8% lower on the session.
How uncommitted is this market? The Dow rose all of 0.002 of a point on Thursday, virtually flat, something that hasn’t happened for that index since Dec. 24, 2001. U.S. bonds were also virtually flat, which is doubly interesting given all the ominous headlines coming out of the Ukraine. Seems that as serious as the situation on the ground is, investors aren’t plowing into the traditional safe haven trade.
There was a flurry of tech-related news after the bell. Amazon and Microsoft reported earnings, and four companies – Apple, Google, Intel, Adobe – settled a lawsuit over wage collusion.
Coming Up: Markets watchers in Asia Friday will focus on March consumer price data out of Japan. This is the final inflation print that doesn’t include the sales-tax increase from April 1, which is expected to have dented consumption, so it will be a telling sign of the strength of underlying demand in the Japanese economy.What You Missed Overnight
Russia Begins Military Exercises After Clashes Ukrainian forces killed several militants outside a pro-Russian stronghold in eastern Ukraine on Thursday as part of a renewed offensive to regain control of the restive region, prompting Russia to begin military exercises again on its side of the border.
Tech Companies Agree to Settle Wage Suit Four big Silicon Valley technology companies, Apple, Google, Intel, Adobe, agreed to settle a lawsuit in which 64,000 employees accused them of conspiring not to recruit each other’s workers, depressing wages.
S&P 500, Nasdaq Rise; Dow Ends Flat An upbeat earnings report from Apple powered gains in technology shares on Thursday, while soft results from several blue chips kept a lid on the broader market.
Amazon Tries Its Own Deliveries Amazon is testing its own delivery network for the final leg of a package’s journey to consumers, putting it closer to same-day shipping.From The Wall Street Journal Asia
Malaysia Prime Minister Aims to Set Fresh Diplomatic Course Prime Minister Najib Razak aims to set Malaysia on a fresh diplomatic course when U.S. President Barack Obama visits the country at a time when it is reeling from the disappearance of Malaysia Airlines Flight 370.
Obama Reassures Abe on Islands Dispute U.S. President Barack Obama offered Japanese Prime Minister Shinzo Abe an unequivocal affirmation that if islands at the center of Japan’s territorial dispute with China were ever attacked, the U.S. would come to Japan’s aid.
Australian Central Banker Warns Against Deep Budget Cuts Australia’s government needs to be careful not to cut spending too deeply in next month’s budget, warns Reserve Bank of Australia board member John Edwards.
Commodity Markets Shift to Brighter View of China Global commodity investors are turning more positive toward China as the country continues to import massive amounts of resources like iron ore, copper and soybeans even as economic growth slows.From MoneyBeat
Chart Watchers: Facebook Poised for Record Highs Facebook’s blowout quarterly results weren’t enough to produce a technical breakout in the stock, but some technicians believe the charts suggest an eventual return to record highs.
Rising Wages Could Spell Trouble for the Fed After a tortuously long wait since the 2008-2009 crisis, this gloomy U.S. labor market is finally improving. There are clear, albeit early, signs of wage growth for most workers. That it means market rates could head sharply higher in the months ahead.
A Checklist for Mario Draghi The evidence that the European Central Bank might launch another round of monetary stimulus over the coming months is growing. But it’s still far from conclusive.
Apple’s 7-for-1 Stock Split Is ‘Very Unusual’ Apple raised eyebrows Wednesday afternoon by announcing a 7-for-1 stock split along with its second-quarter earnings.
Scott London once had one of the more enviable spots in finance: overseeing audits of high-profile companies for a Big Four accounting firm.
Then his world changed.
Mr. London’s sentencing on Thursday to 14 months in prison caps a yearlong saga that hit the headlines last April, when KPMG LLP fired the former partner and resigned as auditor for Herbalife Ltd and Skechers USA Inc. Mr. London admitted to The Wall Street Journal at the time that he had passed on stock tips about clients to a friend who gave him cash and gifts.
Mr. London said the exchanges began with a casual conversation in 2010 with someone he’d “known from the golf club,” jewelry dealer Bryan Shaw.
“Once he told me he had traded, that’s when my heart sank,” Mr. London said in an interview with the Journal. “We had discussions this wasn’t right—I knew it was wrong—but it just happened.”
Federal prosecutors brought criminal insider-trading charges against Mr. London, who they said reaped more than $50,000 in cash and gifts for providing advance notice of clients’ earnings releases or merger plans. The scheme involved tips on five public companies, wads of $100 bills and a sting operation in which agents bundled bags of cash and recorded Mr. London accepting them.
He told the Journal last June that he had been driven by wanting to help out Mr. Shaw, whose jewelry business was struggling. After receiving payments from Mr. Shaw, he said in that interview, “I’d feel like I just robbed somebody and I’d feel totally guilty.” But “unfortunately those feelings weren’t enough to keep me from doing it.” He called it a “slippery slope.”
In September, the Securities and Exchange Commission barred Mr. London from auditing public companies because of his involvement with the insider-trading scheme. Earlier this month, federal prosecutors asked that Mr. London be sentenced to three years in prison. In handing out the 14-month sentence Thursday, U.S. District Judge George Wu rejected defense arguments that said Mr. London had been trying to help a friend and fell down a slippery slope.
By the 14th time Mr. London engaged in the activity, “it wasn’t inadvertent,” the judge said. But the judge took into account Mr. London’s past actions as a 30-year employee with no prior criminal record. “I do think this was extremely out-of-the-ordinary conduct,” Judge Wu said.
Another Obama administration official has landed in the lucrative world of private finance.
William Daley, a Democrat who served as President Barack Obama’s chief of staff in 2011, said he joined Swiss hedge fund Argentiere Capital AG in the new position of head of U.S. operations.
His move follows former Treasury Secretary Timothy Geithner and former Central Intelligence Agency chief David Petraeus taking posts at private-equity firms Warburg Pincus LLC and KKR & CO., respectively.
Argentiere was founded in June 2013 by Deepak Gulati, former head of J.P. Morgan & Co.’s global equities proprietary trading group. In a twist, it was Mr. Obama who endorsed the so-called Volcker Rule, which led to J.P. Morgan and many other banks exiting their proprietary trading arms.
“I guess one could say there’s an irony there, but it’s reality,” Mr. Daley said in an interview Thursday.
Mr. Daley will be a capital raiser and recruiter of talent for Argentiere. He will work from Chicago, where the firm is likely to hire additional staff in the future.
Mr. Daley dropped a potential run for governor of Illinois in September. Earlier in his career, he served as President Bill Clinton’s secretary of commerce and was chairman of Al Gore’s unsuccessful campaign for president in 2000. He said Thursday his political career should be considered over.
“There are a lot of other people who have migrated into other spaces,” he said. “I wanted to be part of something entrepreneurial.”
According to investor documents, Argentiere managed $533 million as of last month, making it relatively small player in the $2.7 trillion global hedge-fund industry.
The fund earned 1.16% in 2013, and was up an additional 1% in the first two months of 2014, the documents indicated.
Mr. Gulati said he was attracted to Mr. Daley because he “managed big businesses” and grew them “through very tough periods.”
The record-sized catastrophe bond got even bigger on Thursday in the latest display of demand in the market that helps insurers offset natural disaster risk.
Citizens Property Insurance Corp., the state-run insurer in hurricane-prone Florida, on Thursday boosted its “cat bond” issue from $1.25 billion to $1.5 billion, with the deal still oversubscribed after being increased, according to John Modin, managing director in insurance banking at Citigroup Inc., which managed the sale. The deal was initially marketed at $400 million.
The $20 billion cat-bond market has benefited from the rising demand from a broader array of investors seeking relatively higher yields. The yields have been falling as demand rises, encouraging insurers to issue more and larger deals as costs have fallen relative to buying traditional reinsurance policies.
“Market conditions have allowed us to exceed our initial expectations in regard to the level of reinsurance coverage,” said Jennifer Montero, chief financial officer at Citizens.
The issue – through a special entity called Everglades Re — is part of a $3.1 billion reinsurance package approved by Citizens’ board on Thursday for the 2014 storm season. With the bonds priced at 7.5% — down from 17.75% on a similar issue two years ago — Citizens will pay $300 million for its reinsurance package, about the same as it paid for just $1.85 billion of coverage last year, the company said in a statement.
Once the domain of specialty funds narrowly focused on insurance-linked debt, cat bonds have become an alternative for traditional corporate bond managers as they seek higher returns, said Joseph Higgins, who manages cat bonds at TIAA-CREF Asset Management.
“The word is out,” on cat bonds, said Mr. Higgins, who has turned away from the riskiest securities as their yields have fallen. He didn’t buy the Citizens deal but said the company was “smart” to take advantage of the rising demand.
Specialized funds have also grown, though their investments also include private reinsurance contracts directly with insurers. In all, specialty funds manage more than $46 billion in insurance-linked assets, up from $3 billion in the months before Hurricane Katrina slammed the U.S. in 2005, according to Goldman Sachs Group Inc.
A lack of major insured losses since Katrina has factored into the drop in yields, analysts said. That said, one large event could quickly sour some of buyers, they said.
Yields could “really” rise because “a lot of players may not expect [a major catastrophe] and may be surprised” at how it affects the market, Mr. Higgins said.
In general, investors are taking greater risks for the yields that they are offered.
Investors will begin to absorb losses on the Everglades Re issue once insured losses from a storm reach $5.2 billion, about the same level as the firm’s deal last year but down from $6.35 billion in its 2012 deal, according to Artemis, a firm that tracks insurance-linked securities. The latest Everglades deal also protects Citizens from losses due to multiple smaller storms during a year, compared with single events as in its previous cat bonds.
TIAA-CREF is buying cat bonds tied to less severe risks such as European windstorms and Midwest U.S. earthquakes, even though their yields are lower, Mr. Higgins said.
“The optimal time to add peak risks such as Florida wind is either after an event” or when investors are fleeing risky securities due to some macroeconomic or political risk, he said.
Given HBO’s predilection for shows featuring lacerated, undead and naked flesh, you could hardly call it TV for youngsters. But there was a note of that in its deal this week with Amazon.com to air some of its shows.
While HBO indirectly competes with Amazon’s video streaming service, offered free to its Prime subscribers, its own paying customers shouldn’t be miffed. Amazon only will screen older shows right away and newer ones with a three-year delay.
Then again, the way Amazon described what’s on offer may ruffle feathers. “The Sopranos,” “The Wire,” “Deadwood” and “Six Feet Under,” which all went off the air between seven and nine years ago, are called “revered classics.” “Father Knows Best” or “M*A*S*H” they ain’t.
But then the latter appeared at a time when one had to tune in using antennae at the time a show was being broadcast on the airwaves – an odd concept for the iPad generation, or even one that has always known VHS and DVDs. Clearly, twenty and thirty something cord-cutters are Amazon’s “prime” audience.
Investors have long speculated about when Apple Inc. will be included in the Dow Jones Industrial Average.
So it’s hardly surprising that Apple announcing an unusually large 7-for-1 stock split has prompted market observers to ask if the iPhone and iPad maker is positioning itself for inclusion in the Dow.
Apple, the biggest U.S. company by market cap, has never been part of the historic 30-stock index, a factor that many observers attributed to its high stock price. Once the split is completed, Apple could be a more attractive candidate for the Dow.
“Apple would now be the next logical tech stock to be included in the Dow,” Toni Sacconaghi, senior analyst at Sanford C. Bernstein & Co., said in a chat with MoneyBeat. He said Apple’s stock split “increases its chances” of getting added to the Dow.More In Apple
The Dow is a price-weighted measure, meaning the bigger the stock price, the larger the sway for a particular component. That is different from indexes such as the S&P 500, which are weighted by market capitalizations (each company’s stock price multiplied by shares outstanding).
David Guarino, a spokesman for S&P Dow Jones Indices, the company that oversees the Dow, declined to comment on Apple and whether it will be considered for the Dow.
“Companies that are in the Dow should be established U.S. companies that are leaders in their industries,” he said, while adding that changes to the Dow are usually made after major corporate events such as bankruptcies or acquisitions.
S&P Dow Jones Indices is a unit of McGraw Hill Financial Inc. CME Group Inc. and Dow Jones & Co., a unit of News Corp that publishes The Wall Street Journal, own stakes in S&P Dow Jones Indices. Some editors from The Wall Street Journal sit on the committee that chooses which stocks get added or taken out of the Dow.
A stock is added to the Dow if the company “has an excellent reputation, demonstrates sustained growth and is of interest to a large number of investors,” S&P Dow Jones Indices said on its website.
Visa is the only Dow component that currently has a stock price above $200. Eight companies have stock prices above $100 as of Thursday’s close.
Apple shares rose 8.2% to $567.77, the biggest gain in two years.
The split will increase the number of shares one holds by seven times while lowering the price accordingly. Based on the recent price, the split would price shares at $81.13. There are currently 15 Dow components that are priced higher than that amount and 15 that are priced lower.
“We’re taking this action to make Apple stock more accessible to a larger number of investors,” Apple CEO Tim Cook said Wednesday on a conference call with analysts.
An Apple spokesman declined to comment.
The impact of Apple being added to the Dow is debatable. Far fewer mutual funds and exchange-traded funds follow the Dow industrials than the S&P 500, which Apple joined in 1982.
Some $1.6 trillion in mutual funds and ETFs track the S&P 500, according to S&P Dow Jones Indices’s calculations as of the end of 2013. That compares with just $30 billion that follows the Dow. Put another way, the S&P 500 ties up more than $50 for every $1 that chases the Dow, meaning it matters more to a company’s share price to get included in the S&P 500 than the Dow.
That said, there is a prestige to getting added to the Dow.
“There is something marquee about being in the Dow, which I think is very subtle and hard to quantify but that may ultimately be beneficial for a company,” Mr. Sacconaghi said.
In a study Mr. Sacconaghi conducted in 2012, he found that companies added to the Dow outperform the S&P 500 by 3% in the 30 days after the announcement. That suggests that there is some “incremental demand” for a stock once it gets included in the blue-chip average, he said.
Nike Inc., Visa Inc. and Goldman Sachs Group Inc. were added to the Dow last year in the biggest shake-up of the 30-stock index since 2004. Alcoa Inc., Hewlett-Packard Co. and Bank of America Corp. were dropped.
What a day for Apple Inc.
Shares of the iPhone and iPad maker surged $43.02, or 8.2%, to $567.77, after the company reported upbeat quarterly results, boosted its buyback and dividend and announced a 7-for-1 stock split.
The gain pushed Apple’s market capitalization up by $38.4 billion, or roughly the equivalent of retail giant Target Corp.'s entire market value, according to FactSet.
Apple’s market cap is now $506.7 billion, tops in the S&P 500 and 17% larger than Exxon Mobil, the S&P 500′s second-biggest company by market value.
The rally pushed Apple shares into positive territory for the year, up 1.2%.
Apple late Wednesday added $30 billion to its stock-buyback plan, raised its dividend about 8% and declared an unusually large 7-for-1 stock split as it reported strong iPhone sales that defied expectations of a slowdown.
Apple’s one-day rally was its biggest since April 2012.
Amazon tries its hand at delivering its own packages – WSJ
The economics of Ghostbusters (video) – EconPop, via YouTube
Home prices seen relatively flat for the rest of the year – Calculated Risk
Suspicion grows that China’s exporting deflation by driving down the yuan – Ambrose Evans-Pritchard, via The Telegraph
Apple is apparently serious about building its own payments system – re/code
The history of passwords, from the Romans to Heartbleed – The Morning News
A musical interlude: Frank Wakefield Band; Mexican Stomp – YouTube
Forbes is having a hard time selling itself – Bloomberg
Enjoy life, court ruin, be yourself – The Financial Philosopher
Not much has changed in the credit-rating world since the financial crisis.
That’s despite calls by lawmakers and critics to shake up the industry, after the credit-rating firms found themselves in the crosshairs over their role in the financial crisis. But the business—and its largest players—have largely remained the same. As WSJ reported Thursday, these big firms have seen their shares rise and profits swell over the past year, as they ride a wave of bond sales fueled by low interest rates.
Standard & Poor’s Ratings Services, Moody's Investors Service and Fitch Ratings have about 95% of the overall market share. Collectively, they employ around 9 of every 10 analysts rating credit, according to an annual Securities and Exchange Commission report.
So where are the new competitors?
They exist, and while they’ve not made a major dent in reshaping global sales, some of the firms are making inroads in certain corners of the credit-rating world. Others argue the wave of post-crisis regulations intended for the three largest firms has driven up compliance and regulatory costs so much that nascent raters find it tough to break in.
Kroll Bond Rating Agency Inc., which started issuing ratings in 2011, supplanted Fitch last year as the No. 2 player in the fast-growing “conduit” commercial mortgage bond space, trailing only Moody’s, according to Commercial Mortgage Alert, a trade publication. Kroll now rates about 70% of those types of large-scale, commercial bonds, nearly all of which are graded by two or three different firms. The nascent, New York-based credit rater has made similar strides in other areas of structured-finance rating.
Kroll President Jim Nadler said the large ratings firms have lost the trust of investors, who are clamoring for an alternative. “We provide investors with more transparent and timely analysis which has been missing from the market and investors are eager for a new voice,” Mr. Nadler said.
Morningstar Credit Ratings LLC, which became a federally registered credit ratings firm in 2008, has plans to expand. By the end of the year, Morningstar, based in New York, will apply with the SEC to rate residential mortgage-backed securities and asset-backed securities, said Vickie Tillman, president of Morningstar Credit Ratings and the former chief ratings officer at S&P.
Alan G. Reid, group managing director at DBRS Inc., a relatively new player in the U.S. and Europe, said post-crisis regulations have created a disadvantage for smaller firms. DBRS, which says it has about 2% of global market share, said it doesn’t have the scale to weather compliance laws, internal auditing and additional staffing like the big guys.
“The cost of regulation is disproportionately high for DBRS versus the longer-established credit-rating agencies,” Mr. Reid said.
The U.S. currently has 10 firms registered to rate credit with the SEC. There are more than 20 in Europe. Companies seek such federal distinction so their ratings comply with investor guidelines or meet other requirements.
Not all companies evaluating credit risk are gunning for federal registration. Rapid Ratings International Inc., which rates the financial health of companies on a scale of zero (worst) to 100 (best), has repeatedly said it doesn’t find the federal designation worthwhile, because of the added costs and liabilities.
Plus, the requirements are still in flux, creating “a playing field that changes, then changes again,” said James H. Gellert, Rapid Ratings chief executive, who has testified before regulators and Congress that his company has no plans of becoming federally registered.
Facebook's blowout quarterly results weren’t enough to produce a technical breakout in the stock, but some technicians believe the charts suggest an eventual return to record highs.
For investors, that would mean a gain another 18%, after the stock edged down 0.1% to $61.28 in recent trading Thursday. Despite Thursday’s slight loss, the social-networking company’s shares have rebounded sharply since they dropped 21% from its March 10 record closing high of $72.03 to the April 4 closing low of $56.75. Since then, Facebook has gained 8%.
Mark Newton, chief technical analyst at Greywolf Execution Partners, said the fact that the stock remains below its April highs doesn’t worry him that much, as the stock has already done enough over the last month to suggest the selloff in March is likely over.
“This [chart] formation remains bullish and one to own,” said Mr. Newton. He believes the stock is now set up for a break above the April highs to reach his short-term target around $67, which is 9.3% above current levels. Eventually, he sees a return to record highs above $72.
Although the big drop in March suffered in March may have shaken the confidence of short-term bulls, it didn’t really do that much damage to the bullish long-term outlook, Mr. Newton said.
The stock stayed well above the January closing low of $53.53, meaning the longer-term pattern of rising lows since June 2013, which technicians see as a necessary component of an uptrend, remained intact. In addition, the never threatened the 200-day moving average line, which many technicians use as a guide to the long-term trend. That line currently extends to $51.66.
Some investors say while the stock recent action is promising, they need to see a little more strength before they get bullish.
“I would definitely like to see it reclaim the 50-day [moving average] to say it was on its way back to new highs,” said Edward Painvin, chief investment officer at Chase Investment Counsel, which manages about $500 million, but doesn’t own Facebook. Many chart watchers use the 50-day moving average to gauge the short-term trend.
A third of Barclays’s shareholders withheld support for the bank’s 2013 pay plan at its annual meeting today, as investors vented their anger at an increase in its bonus pool while the firm’s profits fell.
Overall, 20.8% of the investors, including F&C and Standard Life Investments, voted “no” on Barclays’ 2013 pay policy, and 13.3% recorded an abstention. Only 65.9% voted yes – the lowest vote in favor recorded at the AGM Thursday.
Sarah Wilson, chief executive of voting advisory firm Manifest, said: “10% dissent is when you start to raise your eyebrows… 30% is definitely in uncomfortable territory.”
Last year, 94% of shareholders voted in favor of the pay report.
Like all U.K. banks this voting season, Barclays faced three key votes on its pay policy today: a vote to approve how much it paid directors in 2013; a vote to approve its pay plans for the next three years; and a more specific vote, imposed by European bank regulation, to give it the flexibility to pay bonuses for staff of up to twice their salary.
Of these votes, the first is non-binding, and does not require the bank to take any action. The second two are binding on the firms’ directors, and were passed with little opposition.
Following the AGM, Eugenia Jackson, head of corporate governance and engagement at shareholder F&C Asset Management, said in a statement: “Our vote reflects concerns over the imbalance between employee and shareholder returns”.
She added that this includes “a year-on-year increase in the group bonus pool and compensation-to-income ratio, against the backdrop of flat dividend, decline in adjusted profitability, returns on equity that did not cover the cost of equity, and a £5.8 billion ($9.7 billion) rights issue undertaken to improve capital adequacy.”
Other shareholders to publicly disclose they would vote ‘no’ on pay include Standard Life Investments, and the Local Authority Pension Fund Forum, a coalition of UK public-sector pension funds.
F&C did acknowledge some progress on pay at the bank, however, noting among other things that chief executive Antony Jenkins had forfeited bonuses for a second year in 2013.
In conclusion, Mr. Jackson said, F&C “cannot support the implementation of the remuneration plan in 2013 because we believe that aggregate rewards to staff were excessive relative to performance.”
As we report over on WSJ.com, Barclays directors said Thursday that rivals are picking off the bank’s top staff because it can’t compete on pay. Barclays Chairman David Walker defended the pay decision, saying the bank was being “attacked very aggressively by its competitors,” particularly in the U.S.
–Philip Georgiadis contributed to this post.