David Toms
speaker
276 appearances
2 recordings
1 series
first heard Apr 2022
last heard Oct 2022
David Toms’s voice in public audio — every appearance, attributed to the second.
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Appearances
And and it's not it's not just the the paper-based governance people worry about having to declare the salary of all the executives and those kind of things.
It's the more fundamental stuff.
If you look at the change in environment over the last three years from a valuation perspective.
the behaviors that would have been appropriate to drive shareholder value in twenty nineteen were dramatically different than the behaviors that were appropriate in 2021.
And now they're reversed again.
So if you're setting a management incentive plan in 2019,
And that incentive plan was, let's say, add two percentage points to margin each year and allow your growth to fade by a percentage point.
In 2019, that would have been a really sensible thing to do and would have been value accretive.
By 2021, you would have been hemorrhaging value if you'd been trading one point of growth for two of margin.
Yet now we're back in a position where it's the right thing.
So if you set your incentive plan in 2019, in 2021 you'd be feeling pretty depressed as a chief exec.
Whereas whatever the remuneration committee set in 2021 is gonna, if it was a very
growth driven plan is gonna look pretty bad this year.
Yes.
I mean I think some of the shareholders do have a longer term perspective and you know, they will say we expect a company to be driven this way for value and you know don't worry too much about the market, but you know, in the end the shares are changing hands and the same group of shareholders that supported a remuneration committee in twenty ninety might all have sold their positions by twenty twenty one.
So yes, I think it's a
i it's difficult for a company to stay on top of what the right thing is to do, not just for the shareholders they spoke to, but their current shareholders, when the market's changing so much.
change.
The structural drives are there.
Clearly, if companies have a bit less money and a few more of them are going out of business, then you sell a little bit less new business.
Showing 41–60 of 276 · page 3 of 14
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