Philip Green

[Baileysforchristmas]

AIBU to think Philip Green should put his hand in his pocket to help his staff who will now loose their jobs? Especially when I have just read he gave his wife 1.2 billion, which she paid no tax on because she lives in Monaco

2005: Arcadia pays out a £1.3billion dividend, £1.2billion of which goes to Sir Philip's wife Tina, who lives in Monaco so does not have to pay UK tax.

@gcseexamshelp

Perhaps some of the young females who have worked directly for him over the years might like to confirm as to whether he has done anything illegal in his behaviour to them!

That's very nasty of you @gcseexamshelp

You sound like Carl Beech.

Businesses shouldn’t be forced into bankruptcy because of a pension commitment made 40 or more years ago. As I said the employee contributions are a tiny amount of the funding these schemes need. Employers shouldn’t be forced to under investigation in their current business and employees because of pension promises made decades ago.
So the workers just get told "tough shit" that promise was worthless?

‘Promises’ evolve. Loads of businesses have closed their DB schemes to new entrants, and current members are often moved into a DC scheme with DB rights preserved. Or members might be asked to contribute more to preserve the scheme. Nobody expects things to stay the same forever. Wouldn’t it be great if we could all retire at 55 on a final salary pension? That doesn’t happen, because it is unaffordable.

DB schemes are just too expensive to operate. That’s why hardly anyone outside the public sector offers them any more.

In any event, the ‘promises’ attached to current and legacy DB schemes are not ‘worthless’. You yourself have mentioned the pension protection fund. That’s what the PPF exists for: to bail out schemes that can’t meet their obligations.

I think he is frightful and should be stripped of his knighthood. I assume he got it for services to industry. Well, he's hardly covered in glory now.
Also amazing that people like this can put their immense wealth in their wife's name and effectively tax dodge in Monaco.

Also amazing that people like this can put their immense wealth in their wife's name

There is nothing amazing about transfers of assets between husbands and wives with no tax consequences. It has been a feature of taxation, and marriage, for as long as taxes have existed!

and effectively tax dodge in Monaco.

We can’t tell other countries what their tax policies for people living there should be. Do I think that Tina Green is an arse for becoming non-resident to avoid paying UK tax? Yes. Can the U.K. legislate, reasonably, to stop others doing the same? No.

Mark Carney was very interesting in the Leith Lecture broadcast on R4 this morning. Talking about the nature of value, including civic value.In the Q&A He cited two massive, hugely successful companies that have put 'purpose' above 'profit'. You don't have to be an exploitative arsehole to be successful in business.

You might say that green has been successful in amassing personal wealth but actually pretty crap at running sustainable businesses.

Raining which companies did Carmen quote as putting purpose above profit?

@Thepilotlightsgoneout

Mmm, I don’t like him much but I don’t think that this idea of people being expected to use their personal wealth to cover business losses. Not really how it works is it?

But don't people expect to increase their personal wealth from business profits?

Read up on the veil of incorporation. If business assets and liabilities were indissoluble from personal assets and liabilities, far fewer people would start businesses or take risks.

You might say that green has been successful in amassing personal wealth but actually pretty crap at running sustainable businesses.

Totally if you look at his track record this is what he does. Mark One, BHS, Arcadia

@Andante57

Raining which companies did Carmen quote as putting purpose above profit?

I heard this. Unilever and a French co whose name I didn’t catch. Couldn’t be sure it was purpose OVER profit, but something like prioritising purpose. It was a really interesting lecture. You don’t have to be an economist to follow it, far from it.

Seems he was a master at last generation fashion retailing which didn’t get e commerce and they were doomed to fail eventually, and he’s been mulling the last drop, then COVID. Would be great if he paid it back but very much doubt he will.

Topshop did get e-commerce the issue was the expense & required investment to get the e-commerce to rival eg Asos but also maintain the store portfolio.

Jane Shepherdson was responsible for much of Topshop's success & she went & did the same to Whistles.

@Iamthewombat

Read up on the veil of incorporation. If business assets and liabilities were indissoluble from personal assets and liabilities, far fewer people would start businesses or take risks.

Green (and his ilk) have offloaded all the risk to his workers, suppliers and the ppf and strolled off into the sunset.

Green (and his ilk) have offloaded all the risk to his workers, suppliers and the ppf and strolled off into the sunset.

And your point is? Do you think that the concept of the limited company should be abolished? It’s worked pretty well since 1855, when the Limited Liability Act, which forms the foundation of company law around the world, was passed.

Are you suggesting that we specifically overturn all of that legislation because you think that Philip Green has behaved badly?

Incidentally, as other posters have pointed out, most private sector DB schemes are in deficit and have been for some time. Since interest rates hit the floor in 2009, to be exact. Are all the trustees of those schemes in the wrong and liable for prosecution for something they have no control over?

And your point is? Do you think that the concept of the limited company should be abolished? It’s worked pretty well since 1855, when the Limited Liability Act, which forms the foundation of company law around the world, was passed.
There is a world of difference between someone starting a small business who doesn't want lose their modest home and people with multiple lavish houses. Making both entirely immune from the effects of failure doesn't make sense. We are always told by their apologists that these "wealth creators" deserve massive rewards for the "risks" they take - but there are no risks for the already massively wealthy.

DB schemes are just too expensive to operate. That’s why hardly anyone outside the public sector offers them any more.
I understand this - but surely if you sign up for a pension on given terms, it's really poor to be told 30+ years later and at a point when you really don't have a lot of options, that what you signed up to (and kept your part of the bargain) cannot be honoured.
It's a betrayal of trust - promises should not have been made that couldn't be honoured.
Apart from anything else, how is anyone expected to trust any pension provider if they can just turn round and say "sorry (not sorry) but you won't be getting everything we promised?

You might say that green has been successful in amassing personal wealth but actually pretty crap at running sustainable businesses.

This.

He made some astoundingly idiotic decisions around TopShop that anyone with a GCSE in Business Studies could have avoided.

He might be wealthy but he's not innovative or astute.
He's the BetaMax of retail.

There is a world of difference between someone starting a small business who doesn't want lose their modest home and people with multiple lavish houses. Making both entirely immune from the effects of failure doesn't make sense.

How would you decide who gets the limited liability? A means test?

Or would you decide that once a shareholder in a business reaches a certain measure of wealth, that their personal liability becomes unlimited? It would be a bit of a disincentive to wealth creation in the company!

You apply the concept that the corporate body is separate to its individual shareholders universally or not at all.

We are always told by their apologists that these "wealth creators" deserve massive rewards for the "risks" they take - but there are no risks for the already massively wealthy.

Well, I’m not one of those apologists but you have to admit that borrowing a ton of money to buy a business brings risk with it, irrespective of how personally wealthy you are. Even the Greens will have lost wealth because of recent events. The Arcadia shares held by their family investment vehicle are now worthless. I say this not to solicit sympathy for them - they certainly don’t deserve it - but to point out that even wealthy people are exposed to risks and, yes, rewards, by reason of investing their own capital and borrowed money. Lenders are not stupid and will usually make sure that pretty serious guarantees are in place.

Incidentally, I may disagree with you but you are a good debater.

@DynamoKev - the business has gone bust (in large part due to its pension obligations). Lots of “promises“ will not be met. That’s what happens. Why should a hugely onerous promise to a few individuals made decades ago be the exception? There are plenty of debts (rent, taxes, etc) due and owning now that won’t be paid in full. The pensioner in the dB schemes have got a lot for nothing already. It’s not as if someone has taken their contributions- quite the opposite. They have got a huge return on the contributions they’ve made and this has been to the detriment of the employees of the current business and stakeholders. I don’t see them as terrible victims to whom promises made decades ago must be kept at all costs.

In any event there is legislation which can require contributions by shareholders into defined benefit schemes as happened with BHS. There is no equivalent for any other obligations.

I think our corporate law structure is largely fine as it is and there is a good balance between encouraging business and entrepreneurs and maintaining rights of employees and other stakeholders. I say that as someone who has worked in the area for years and doesn’t rely on tabloids for info.

Also as @Iamthewombat points out, they obviously aren’t “entirely immune” from the effects of failure. Their biggest asset (their business) is worthless and they will have to pay hundreds of millions into a pension fund.

Tbh anyway a great many large companies are owned by pension funds and life insurance companies. No one would invest in companies if they could lose all their wealth which is why the advent of limited companies led to such a huge increase in global wealth.