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a fairytale for the investing classes



Once upon a time, upon a level playing field, there were these two companies: Avarice Holdings & the Porty-Prime Trust. Both did wonderfully badly one day, in the hurly-burly of stock market trading, after they’d announced losses of oh so many tens of millions of dollars each. Which rather spoilt their stockholders’ breakfasts...

So, all the little shareholders in Avarice Holdings, from all around the world, got together in a very large room to punish the company directors, so that they wouldn’t enjoy their breakfasts either (or even be able to eat them without expensive dental work). But when the vote was taken, the man from the Porky-Prime Trust got up and voted all of the company directors a big raise, so that they could stop worrying about where all the money went, and have huge cars and private jets instead. Now, this made all the little shareholders very angry, but even when they put all of their shares together in a big pile they still didn’t have as many as the man from the Porky-Prime Trust, so they had to roll over, and even pay for all of their own drinks.

When the Porky-Prime Trust’s little shareholders heard about this, they were very sad for all of Avarice Holdings’ small investors, and their perfectly enormous bar tab, so they hurried into their annual shareholder’s meeting so that they could throw out their board of directors even more quickly - especially their wicked CEO, Sir James Negot. He’d been saying very rude things about them in all the newspapers...and one shareholder had caught him writing them on the toilet door, which even made the cleaning lady mad. But, just before the big meeting, which was going to be held in another very large room, something terrible happened!

One of the little shareholders, whose name has been witheld for legal reasons, found out that Avarice Holdings owned lots of shares in the Porky-Prime Trust, lots more than all the other shareholders put together. This made them even angrier, and some of them had to take extra medicine for their ulcers, to stop their tummies exploding. Then they called all the newspapers to announce a special meeting, so they could try and merge the two companies, and throw out all the management.

Sir James Negot then called a press conference all of his own, and he said that neither companies’ articles allowed this...and that all the little shareholders could go and do something very naughty, that could get them arrested in Tasmania. Then all the company directors got extra huge pay rises, and all sorts of other goodies that gutted both companies so badly that everyone had to fly off to the Riviera with their beautiful accountants, who didn’t wear any swimsuits at all...

And, that’s how managerial salaries are determined.


John Henry Calvinist