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CEO Daily Brief – Jan. 4, 2011

U.K. Manufacturing Expands at Fastest Pace Since 1994 In a sign that bodes well for the policies of the new …

U.K. Manufacturing Expands at Fastest Pace Since 1994

In a sign that bodes well for the policies of the new Conservative Party government, U.K. manufacturing has increased at the fastest pace in some 16 years during the month of December. Bloomberg News explains that U.K. exports increased, with a weaker British pound upping the demand for British goods in foreign markets.

Even though the manufacturing-led economic recovery appears to be gaining momentum, Bloomberg reports that British officials say the current U.K. government reductions may hurt growth in the economy. The United Kingdom is supposed to lose some 330,000 government jobs, according to media reports.

However, employment growth stayed close to the record high seen in November, Bloomberg added.

The British experience could be a model for the United States and other nations which may need to shed some government jobs/spending in order to improve the overall economy and reduce deficits. The new Republican-controlled House of Representatives should be watching the British approach unfold.

For more about U.K. economic growth, as reported by Bloomberg, please click here.

 

Strategy Behind Goldman Sachs Investment in Facebook

Facebook has raised $500 million in new venture capital funding with a valuation for the company at $50 billion. Goldman Sachs is leading the round with $450 million. The balance is coming Digital Sky Technologies, an existing Facebook investor.

But there is more here. Fortune magazine reports “Goldman is expected to raise as much as $1.5 billion from investors for Facebook.”

Goldman may be trying to create an arrangement which could be unique among investment structures. Fortune says it will try to make a “vehicle" to let wealthy clients invest in Facebook. Even though the vehicle could have investments from thousands of clients, it would be considered just one client for the purposes of regulations from the U.S. Securities and Exchange Commission.

Fortune explains that the SEC requires companies with more than 499 investors to disclose their financial results to the public. It is unknown how the SEC will view the arrangement, says DealBook. The SEC could require Facebook to disclose financial information. How will it impact a potential IPO from Facebook? It may not mean that a Facebook Initial Public Offering is coming any sooner, says Fortune, it could even delay it.

CEOs at other large companies should watch the events unfold between Goldman Sachs and Facebook. It may give them ideas for their own companies.

For more about the Goldman Sachs approach with Facebook, as reported by Fortune, please click here.

 

Top Canadian CEOs Earn Average of $6.6 Million during Recession

Canada's top CEOs earned 155 times the average income earner during the recession, the Canadian Centre for Policy Alternatives said.

The Montreal Gazette reported that the 100 top CEOs of publically-traded companies earned an average of $6.6 million in 2009, compared with $42,988 for the average Canadian, based on the centre’s numbers.

This is an increase when compared to 1998, when Canadian CEOs earned 104 times more than the average Canadian wage earner, according to the centre. 

The actual numbers on CEO pay for 2009 may be higher because of a new reporting regulation that gives a statistical estimate of CEO stock options. The Gazette said that these options represent about one-third of the CEOs' pay in 2009. The stock options are taxed at a lower rate than the regular salary, says the Gazette.

According to the centre, the 10 highest-paid CEOs in Canada during 2009 were:

  • Aaron Regent, Barrick Gold Corp. $24,217,040
  • Hunter Harrison, Canadian Natl. Railway $17,343,160
  • Gerald Schwartz, Onex Corp. $16,689,758
  • Edmund Clark, Toronto-Dominion Bank $15,188,391
  • Nadir Mohamed, Rogers Communications $13,687,699
  • Fred George, Gammon Gold $13,061,177
  • Edward Sampson, Niko Resources $12,949,343
  • Gordon Nixon, Royal Bank of Canada $12,095,885
  • Jim Shaw, Shaw Communications $11,557,119
  • Peter Marrone, Yamaha Gold Inc. $11,534,588

The centre says that for this list compensation includes base salary, bonus, shares, options, pension and other benefits.

No doubt most labor groups and liberal politicians in Canada found little to celebrate about the CEO salaries but the question arises: if Canada did not pay their CEOs a competitive amount, how many of these chief executives would have left for the United States or another country where their efforts would be justly rewarded. The CEOs, not their critics, are the ones who will likely lead Canada out of the recession into an era of higher paying jobs for many citizens.

For more about Canadian CEO salary, as reported by the Montreal Gazette, please click here.

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