If you like your annual reports full-fat, glutinous and larded with humbug, then feast your eyes on the latest offering from Wm Morrison. It, ahem, takes the biscuit on the crowded shelf of corporate waffle(s). Morrison had a miserable year last year, posting a “reported loss” of £792m and paying a dividend which the company admits is unsustainable.

In the report full of the traditional smiley happy people, this is described as “a strong platform” by its finance director. The aptly-named Trevor Strain gushes about “investing in our customer proposition”, the standard supermarket-speak for cutting prices. His new boss, chairman Andrew Higginson, a Tesco lifer, is full of praise for his predecessor, but noticeably cooler in marking the departure of CEO Dalton Philips, fired after five difficult years.

Mr Philips’ departure provides a little insight into why politicians of all hues see votes in bashing business. His pay package in his final year added up to £2.1m. The remuneration committee decided that he had hit enough targets to justify 60 per cent of his maximum bonus, including  for his “personal” attributes, whatever they were. Because he’s classed as a “good leaver” he will collect a year’s salary and will keep the right to future share payments, which could add up to another £2m as a going-away present.

Remuneration committee chairman Johanna Waterous explains Morrison’s delicious confection of salary, bonus and LTIPs, incentives “designed to align with the delivery of short and long term objectives”. Mr Philips, we’re told, did a fine job in trying circumstances.

Sir Ken Morrison once famously said he could hire two shop assistants for the price of a non-executive director, and they would be more use to the business. Today Mr Higginson could hire twice as many for the £92,000 paid to Ms Waterous, a 22-year veteran of Mckinsey,  and still get change.

The point here is less the reward for failure – since Mr Philips was headhunted from the comparative safety of the Weston family group, he could demand tough terms – but the sheer scale of those rewards and the oleaginous corporate-speak of today’s annual reports. As so often, words and figures hardly seem to agree. At last year’s AGM Sir Ken compared the output from his herd of bullocks favourably to Mr Philips’ presentation. Mr Higginson should brace himself.

Pension these people off

It’s a decade since “Red” Adair Turner’s Pensions Commission started on its journey that has given us the joys of “auto-enrolment”, obliging every business to push all employees into a pension scheme. The Commission was wound up, but an uncomfortable alliance of vested interests wrote this week asking for it back.

The bosses of the Trades Union Congress, the National Association of Pension Funds, and the Association of British Insurers want a permanent version “for the politics of pensions to work better”. All three trade bodies can sense their power and influence waning and don’t much care for it. Trades unions are effectively confined to the public sector, where pension reform has barely started.

The NAPF and ABI represent the collective investment industry, which has produced magnificent returns for those running the money, and a spectrum of fair to awful returns for the beneficiaries.  The new rules on commissions, the constant fiddling with pension tax relief, and the rise of Individual Savings Accounts are combining to slow down the fund management gravy train. No wonder they want the commission back.

Puzzle corner

The consensus forecasts for last week’s first quarter results from Royal Dutch Shell and BP were wildly out, as both companies declared profits far in excess of the expectations of the army of oil analysts. This failure is relatively new, since in the past the forecast numbers had mysteriously closed to nearer the actual figure in the weeks before the announcement.

Is this (a) because today’s analysts are hopeless at the task of forecasting or (b) because the penalties for breaking the rules restricting “guidance” to the analysts are now much more severe. And the tie-breaker: Is the danger of a false market in the shares ahead of the announcements raised or lowered as a result of the restrictions?

This is my FT column from Saturday

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