Green financial futures

 

With world leaders at the G20 summit earlier this year pledging $1.1 trillion to boost the economy while aiming to build an inclusive, green and sustainable recovery, the future looks bright for renewable energy.

Not only are renewable energy companies busy developing green technologies, such as wind, solar and geothermal, but traditional energy companies – the oil and gas behemoths – are also banking on a greener future, and basing their strategies around promised investment from government and fiscal incentives to up their game.

All of which is great news for accountants working in renewable energy, who tackle sector-specific financial issues against the backdrop of a dynamic commercial environment.

Challenges for accountants

One of the financial challenges particular to the renewable energy sector is explained by David Gray, finance director of independent energy consultancy McKinnon & Clarke: 'The main issues are balancing short-term and long-term goals,' he says. 'Prices for renewables will undoubtedly come down in the long term and are forecast to drop below traditional energy prices – but how do renewable companies balance the current needs of profits, cash flow, investment in R&D and investor needs against the longer-term potential benefits to be gained?'

An associated difficulty is that accountants have to rely on traditional financial modelling – such as return on investment – while dealing with a business model that usually presents an imbalance with traditional technology payback in terms of time and efficiency.

FDs working in renewable energy also face familiar problems shared by their counterparts in other industries amid the global economic crisis.

'Those who took on too much debt in the past few years are now working hard to make the interest payments or refinance the debt as it matures,' says Robin Griffiths, an interim CFO who has worked extensively in oil and gas, as well as mining. 'For those management teams that were more conservative, some great opportunities are materialising to pay good prices to purchase rivals or enterprising young companies who were less prudent. For accountants, those with good treasury or corporate finance experience are really feeling wanted right now.'

One benefit renewable energy has over some other sectors is that there is a government-supported drive to invest. But how are the promises to build an inclusive green and sustainable recovery likely to convert into real investment?

Griffiths is sceptical as to whether it will translate into hard cash in the short-term. 'Unfortunately, we are now seeing that the direct investment available from governments is minimal, as they are too indebted themselves to have much free cash.'

The next big thing?

The truth is that investors will gravitate towards the areas most ready for profitable expansion. Adrian Scholtz, who leads KPMG's renewable energy corporate finance activities in the UK and Germany, believes the most likely are 'directly linked to investment promises in the Budget'.

The first is wind power; Scholtz says that the UK's Budget announcement of £525m for the development of offshore wind projects directly led the Eon board to announce investment in building the first phase of a wind farm in the Thames Estuary which, once complete, will be the world's largest.

Scholtz also believes that carbon capture and storage is an area ready for expansion, where natural storage facilities such as old oil and gas fields are used to catch CO2 and store it.

Griffiths, though, warns, 'We will only start approaching profitability for the total product once there is sufficient demand to push down unit costs sufficiently – which for many green technologies seems years away, if not longer – and the most obvious hope for profitable renewables in the short-term is the mass production of some kind of clean car technology.

'On the back of commercial development, some of us hope that costs will come down enough to enable their deployment to somewhere with real pressing need and suitability such as mass solar energy to a developing part of Africa. And accountants can help be a part of that.'

Career prospects in renewable energy

For trainee accountants, what is the job market climate in renewable energy?

'Career prospects for trainees are strong,' says Roland Seddon, regional director at Hays Senior Finance. 'Jobs in renewable energy are likely to increase over the coming year.'

And those jobs can be found not only at the energy companies themselves but also at the professional services firms that advise them. They provide, says Scholtz, a 'big opportunity for people with financial skills to have more commercial roles'.

And as well as tax-related issues increasing in the future – such as organising tax-efficient structures for energy companies – he says that the majority of his work involves investment appraisals.

Working in industry is also attractive, partly because of the buzz surrounding renewable energy and its importance going forward, not to mention its worthy connotations.

'Blue chip energy companies are diverting more of their resources into this sector; we are seeing more and more small renewable energy start-ups,' says Seddon. 'The fact that it's a growing sector – one that's enjoying increased investment – makes it very attractive. Candidates are increasingly looking to work for companies that can demonstrate a social and moral conscience; and they are keen to display green credentials on their CVs.'

Although previous experience in renewable energy is valuable when looking for work, few finance professionals have long track records due to the relatively embryonic state of the sector. So which existing skills will stand you in good stead?

Those with experience in the mining, manufacturing and engineering sectors have an advantage, according to Seddon, who adds, 'Strong candidates will be able to demonstrate skills in investment appraisal, raising finance and corporate finance – skills attractive to a number of employers in renewables as they look to grow over the coming years.'

International opportunity for green thinkers

So if you want to do your bit for the world and move into renewables, which countries will serve you best as you forge an international career?

The answer may surprise you because, while the US fares poorly due primarily to its carbon emissions, Gray points out, 'Most of the largest international players are either based or have a presence in the US; it has companies covering all of the main renewable energy sources. For example, there are companies such as SunPower, who developed photovoltaic [solar] solutions with far greater efficiencies, while GE Energy is the world's leading turbine supplier.'

If you want to work in Europe, Germany is considered by many to be a leader in the development of green policies. 'Germany accounted for 50% of the world's photovoltaic installations in 2007,' says Gray. 'A large part of the reason for this is the system of feed-in tariffs, which rewards those who invest in renewables and export to the grid with high resale prices for the energy exported. This seriously reduces the payback times for renewables.'

As Gray concludes: 'Because of the conflict between traditional financial accounting methods and environmental concerns it certainly helps for accountants to be green thinkers, so that they can think outside the box and look at other returns, rather than just financial ones.'

CASE STUDY: HEENA PANESAR

Heena Panesar is studying for three of her final papers with Kaplan Financial and currently working at Switch2 Energy Solutions, which procures and sells energy to private wire networks. It uses combined heat and power (CHP) engines, which produce heat and electricity in the same process, consuming about 35% less fuel than if the energy is produced separately.

'I wasn't specifically looking to get into the energy sector; I had no idea what was involved, but two and a half years later, it has turned out to be a great area to be working in. When I started, I had no idea what a CHP engine was and how it was energy efficient,' says Heena.

Heena particularly likes working in the energy sector because it is so dynamic. 'It's a great field to work in – there's a growing need for renewable sources of energy, and new developments are moving more towards the use of CHP as an efficient and green way of producing energy. '

She has developed a sound knowledge of the sector through her work.

'On a monthly basis, I produce the financial accounts – but in line with that, there's a lot of investigative work to do on the inputs and outputs of the energy system. I get involved with everything from calculating the selling tariffs for our customers to producing models to monitor the efficiency of the system. I have meetings with clients to discuss any issues that have been identified as a result of the analysis; this can in turn save the company money.

'Now, I'm using the technical knowledge to contribute to the company on a profit level – and it's great working for something that's so important these days.'

Beth Holmes is a freelance journalist

ACCA Increase to exam and exemption fees

From 16 August 2009, the exam and exemptions fees for the ACCA Qualification will be increased. These fees will apply to all students who register with ACCA after the closing date of 15 August and to all students entering for the December 2009 exams.

New fees

Papers F1-F3 £53

Papers F4-F9 £66

Papers P1-P7 £78

Students who registered for the ACCA Qualification before 15 August and have submitted requests for exemptions will still pay the existing exemption fees:

Papers F1-F3 £50

Papers F4-F9 £60

Why is ACCA increasing fees?

The demand for the ACCA Qualification continues to grow and more students are sitting exams in more locations than ever before. Consequently, the costs we incur in running our exams continue to increase.

In addition, to maintain the rigour and reputation of our exams, we are continuing to invest in the latest technologies in exam assessment and delivery to ensure our exams continue to be administered in an efficient and secure manner.

Please can you inform your students of these changes.

Regards

ACCA

Global ACCA pass rates for the June 2009

More than 5,000 students successfully complete exams

17 Aug 2009

A total of 187,335 candidates took 370,715 papers in ACCA's June 2009 exams session. This compares with 182,449 students taking a total of 365,528 papers in December 2008.

The exam results, issued on 17 August 2009, revealed that 5,416 students successfully completed their final examinations to become ACCA affiliates.

The pass rates for the June 2009 sitting of the ACCA Qualification are as follows:
F1 Accountant in Business - 73%*
F2 Management Accounting - 57%*
F3 Financial Accounting - 55%*
F4 Corporate & Business Law - 43%
F5 Performance Management - 41%
F6 Taxation - 61%
F7 Financial Reporting - 30%
F8 Audit and Assurance - 34%
F9 Financial Management - 42%
P1 Professional Accountant - 48%
P2 Corporate Reporting - 44%
P3 Business Analysis - 50%
P4 Adv Financial Management - 30%
P5 Adv Performance Management - 32%
P6 Adv Taxation - 37%
P7 Adv Audit and Assurance - 37%
SOURCE: ACCA

Train the Trainer

ACCA Pakistan’s teacher training initiative

As part of ACCA’s continued efforts towards developing excellence in professional accounting education and establishment of best practices among tertiary accounting educators, a workshop - “Train The Trainer” was held today at a local hotel in Karachi led by Dr Afra Sajjad, Head of Education and Policy Development, ACCA Pakistan and Mr Wali Zahid, CEO, Skillcity. The participants appreciated ACCA’s innovative efforts at enhancing the capacity of accounting faculty. They felt that the workshop was very useful and relevant to their work as it enabled them to learn new teaching skills and methodologies.  Speaking at the event, Dr Afra stated that the “Through initiatives like Teach the Trainer ACCA aims to facilitate tutors to help young men and women of Pakistan to pursue their ambition of a successful career in finance, accounting and taxation and become world class professional accountants”. Mr Wali Zahid emphasised on achieving student excellence through motivation not only towards academic endeavours but also towards professional life.

Courtesy By ACCA

The training of tomorrow’s business professionals requires a radical overhaul

The speed of business in the 21^st century means that management training and development will have to alter drastically according to The future of professional development, the latest report in ACCA’s (the Association of Chartered Certified Accountants) Insight Series.

According to the report, if continuous professional development programmes are to be fit for purpose, keep up with regulatory change and provide acceptable returns on the hundreds of millions of dollars invested each year, then a radical overhaul is needed.

Tony Osude, acting director of professional development at ACCA said: “The set piece ‘talk and chalk’ lectures cannot survive. Business professionals need immediate access to good quality information, and they need to know how to apply it to their work.

Mr Arif Masud Mirza, Head of ACCA Paksitan said that “Accountants are operating in a very different environment and we believe all professional development programmes should reflect this. Although there will always be a place for traditional classroom learning, the way they are taught is going to fundamentally change. The generation entering the profession now is far more technologically adept, and the business benefits of using technology to teach are compelling – it’s really about organisations getting the training blend right.”

Courtesy By ACCA

ACCA Global Economic Confidence Survey

Latest findings reveal renewed optimism and confidence

According to ACCA's latest global survey of finance professionals, economic recovery should be possible within the next 18 months.

The ACCA Global Economic Confidence Conditions Survey for the second quarter of 2009 reveal tentative signs that panic is no longer a major driver of the economy.

Optimism continues to depend substantially on the actions of national governments, but the reliance on state assistance has dissipated since the survey for the first quarter of 2009, and business confidence is now more clearly linked to expectations of future growth. Morale in key regions such as Asia Pacific is much higher, with small and medium-sized enterprises and large financial firms in particular increasingly buoyant about the future. 

According to the survey, 64% of finance professionals feel the global economy has bottomed out – twice the number of those in the Q1 survey. More than a third even expect a recovery within the next 12 months.

However, 10% of respondents are far less optimistic, saying they expected the downturn to remain for three years or longer – a view that is twice as common among public sector accountants.

As far as regional expectations are concerned, the survey reveals that Western European financial professionals the least optimistic about a recovery, while those in Africa are more likely to believe conditions are improving. Respondents in Asia Pacific, however, are generally the most optimistic and consider that the worst is behind them, with expectations of a speedier recovery.

Despite this largely positive shift in perceptions, the survey of 546 ACCA members in 77 countries found only a marginal improvement in trading conditions in the three months to May 2009.

'While there is little evidence of economic recovery, there is renewed confidence and optimism,' said Dr Steve Priddy, ACCA director of technical policy and research. 'Our next quarterly survey will look for real changes in trading conditions which support that viewpoint and whether the private sector is backing its confidence by investing in people and capital – or whether public sector finance professionals are right to think that the global economy has some way to go before recovery begins.'

Click Here For More information

Courtesy By ACCA

World leaders: action still required

In spite of the embryonic signs of recovery, there are still many challenges facing world leaders. The first is to ensure that they are not too optimistic. The IMF and World Bank are still predicting declining growth and contracting output around the world, and the outlook according other indicators such as unemployment will remain gloomy. Although the steps taken so far may be beginning to yield results, much more work is still needed to ensure the recovery.

Any optimism may actually go further than stopping the recovery in its tracks - it could reignite the financial crisis. Leaders and economic policy makers will need to ensure that they balance their approach: large government deficits could generate inflation and make it more expensive to borrow on international markets. But implementing a shift towards policy restraint too early will impact with considerable force on the fragile recovery.

A further challenge facing world leaders is the waning momentum for change. As some indicators begin to pick up, public and political pressure to push through reforms is decreasing and there is a danger now that the impetus for radical and necessary change will be lost. The result of this would be - except for a few cosmetic changes - the global economy will emerge from this recession looking much as it did before, only smaller and with more people unemployed and angry.

Reform, for example, of the Bretton Woods institutions is something that is not only important - it is something that has to be implemented more quickly. The Western powers need to face up to political reality and offer a reform of governance that properly reflects the distribution of power in the new global economy. Without these reforms, developing economies, particularly countries such as China and Brazil, may begin to reject the institutions on the basis that they are not representative enough to efficiently pursue their primary objectives, ie. stability of the international financial system and the fight against poverty.

The scale of the current crisis has been associated with inadequate regulation and supervision of banks and financial markets. But rushing through new financial regulation in a purely reactive response to the financial crisis would be a mistake. The priority should be to ensure that existing regulation is enforced thoroughly.

There have also been many political criticisms relating to fair value accounting rules, alleging that they caused some of the market volatility and may have been a factor in the financial crisis. Fair value did not cause the financial crisis, and world leaders should use this crisis to show commitment to the principle of an accountable, transparent and sound system of international regulatory cooperation, maintaining full support for the move towards a single set of high quality international accounting standards. The globalisation of business means that one set of reporting standards, the principles-based IFRS, is essential.

In addition to bigger businesses, SMEs are vital to driving economic recovery through the role they play in creating jobs, innovation, and macroeconomic growth. It is crucial that leaders recognise the importance of SMEs and find more ways to collaborate and partner with business, civil society and governments in encouraging institutional changes to help improve the operating environment for SMEs.

Finally, while politicians struggle to retain votes and work economies out of recession, it is crucial that they acknowledge the climate crisis as well. Acting early, as key policy documents, economic forecasts and project proposals are urging, will raise our chances of diverting catastrophe at a reduced financial and environmental cost, while building a strong green economy.

Courtesy By ACCA

Shocking Accounting Scandal at Huron Consulting Group

Just after market close on Friday July 31st, 2009, Huron Consulting Group dropped a bombshell on investors by announcing an intention to restate its 2006 to 2009 financial statements due to incorrect accounting of “non-cash charges relating to how payments received by the sellers of certain acquired businesses were subsequently redistributed among themselves and to other select Huron employees”. Shell shocked investors immediately sold HURN stock, causing the stock to fall by an astounding 70% from close of market on Friday at $45 to open at a paltry $12 per share at open of market on Monday August 3rd, 2009, and leading to an instant shareholder value disappearance of almost $700 million.

It is now apparent that Huron had agreements to pay some employees at four of its recent acquisitions “earn-out” compensations based on their unit performance after the transaction was completed. These agreements were on their own quite legal, but their accounting was not quite done right. Instead of charging these compensations to P&L expenses as non-cash charges with negative impact on Huron’s net income, they were booked as purchase price goodwill on the balance sheet, thus with no impact on net income and EPS.

Thus, net income and EPS were overstated for these years, and the restatement has the effect of reducing net income by these incorrectly accounted charges. These restatements are not insignificant, in 2006 net income would have decreased by $4 million from $27 million to $23 million; in 2007, net income would have decreased by $18 million from $42 million to $24 million; in 2008, net income would have decreased by $31 million from $41 million to $10 million; in Q1-2009, net income would have decreased by $4 million from $10 million to $6 million. Cumulatively, the total restated amount was $57 million over these four years.

Upon disclosure, the market reduced Huron’s shareholder value by 12 times the fictitious additional earnings of $57 million. Just before this announcement Huron’s P/E ratio was $44 share price divided by estimated EPS of $3.16 or about 14x. Which kind of makes sense.

Huron started as a spinoff from Andersen in March 2002 with about 25 partners and about 200 consultants, principally from Chicago and some pockets in New York, Houston and other parts of the US. The heart of Huron was the Litigation consulting group from the Midwest offices at 33 West Monroe, Chicago downtown. In a matter of weeks while Andersen was crumbling, Huron was able to pull together its core partners, and with financial backing from Lake Partners and Gary Holdren and Dan Broadhurst in the lead, quickly set up its own operating structure and separate offices. Since the core partners had strong and profitable individual practices, they were able to move their clients and personnel to Huron, and given the imminent collapse of Andersen, this was an appropriate move, though with always the inherent risk of a startup entity. Paul Charnetzki, Jim Rojas, Michael Kennelly, Jim Roth, Lisa Snow, Susan Gallagher, Gerald Richardson, Mukesh Gangwal, Michael O’Connor, Robert Wentland, Timothy Zeldenrust among others formed the core team of Chicago partners who launched Huron. Interestingly, this group was a purely consulting practice and had no connection with the Enron audit which caused the downfall of Andersen.

Even at its inception Huron had strong and profitable practices, and notched up annual revenues of $35 million. It focused on litigation services, forensic accounting, bankruptcy, education and healthcare consulting, all services in good demand. Over the years, it grew with amazing rapidity adding new services, new experts, new consultants and new offices both in the US and abroad. Revenues surged to $100 million in 2003. Huron went public in October 2004 (Nasdaq: HURN) with revenues of $150 million and 600 employees, providing an early and financially rewarding exit for Lake Capital and making the initial core partners quite wealthy independent shareholders. Huron continued to grow to $600 million in revenue in 2008 and with 2,000 employees, bucking the economic downturn with services that were quite recession-proof over the last few years. Huron also made a number of acquisitions during this time extending its service depth and international footprint. In 2009, Huron was expecting revenues of about $700 million and about $65 million in net income.

So what happened?

The media and blogs are conveniently pinning the Huron debacle on its Andersen roots, and hinting that the Enron malfeasance bled into Huron. We don’t fully subscribe to this theory, while Huron’s senior management team certainly was from the core of Andersen Chicago, it was hardly involved with Enron’s audit and was quite angry with the way things turned out for the Andersen firm taking the hit for the bad actions of a few employees.

Rather than jumping on the Andersen bandwagon, we think that what transpired here was the result of simple universal human emotions - fear and greed - playing themselves out. Fear of reporting less than satisfactory results to Wall Street which had very high expectations and the financial greed associated with an increasing stock price were in our opinion the key underlying factors for this debacle.

Put yourself in the shoes of Gary Holdren, Huron’s CEO in 2008. Would you rather report to a tough Wall Street crowd a stupendous 23% increase in sales from 2007 and a nearly flat change in net income OR would you report a robust sales growth and a precipitous decline in net income from 2007 to 2008. While we may never find out if Gary Holdren senior management knew of this accounting treatment, our guess is that they preferred the former position and continued to report false numbers in the fervent hope they never get found out. In the battle of truth versus falsehood, truth unfortunately got trampled by greed.

And ironically it is really not senior management which came out with this revelation. According to Huron’s statement, it came to the attention of the Audit Committee of the Board of Directors that there was something amiss when selling shareholders of an acquisition had an agreement among themselves to reallocate a portion to a Huron employee who was not a shareholder, upon which it launched an inquiry to see if other similar situations existed, and further engaged legal and financial advisors and notified PricewaterhouseCoopers, Huron’s auditors who were apparently unaware of this situation. Reading between the lines, it appears that the Audit Committee stumbled upon something and had the guts to chase it independently, senior management never seemed to be quite ready to disclose its errors.

With all this in the background, we are ready to hand out our kudos and shame awards:

First, kudos to the Audit Committee (John McCartney, Dubose Ausley and James Edwards) for unearthing this issue and pursuing it fearlessly to its terrible end.

Second, shame on senior management to succumb to greed and not complying strictly with accounting standards

Third, shame also on the auditor, PricewaterhouseCoopers for failing to spot this issue, especially in 2008, when the amount of money kept in goodwill was $31 million, three times the true net income of Huron of only $10 million

Fourth, shame on Huron itself for providing accounting, internal audit, internal controls, Sarbanes, and similar advice to its corporate clients, while following shady accounting practices. Physician, heal thyself first.

Finally, our sympathies for all the hard working and honest Huron consultants who had nothing to do with acquisitions or their accounting, and are likely as mad as anyone that this could happen to them.

The Chicago Tribune and Crains Chicago are already asking whether Huron will survive this scandal and continue as a company, given the impacts on its standing and potential large scale departures. We think that while this is a devastating hit on the company’s reputation and stock price, it is not a body blow and (unlike BearingPoint) the business will survive over the long term as its consulting service is quite healthy and utilization % quite reasonable. The first steps to announce the restatement, take the full market hit, fire the CEO and CFO, are all in the right direction. It will be tough going for a while (3 shareholder lawsuits already filed), but mass exodus of consultants seems rather unlikely (really, who’s hiring nowadays), and if the new management team which has already survived the Andersen crisis has the right attitudes and goals, (we hope) will make the move to a reputable consulting firm.

We’ll watch and see how things shape up, but the stock seems to be slightly on the upswing with a 6% move up today, which indicates to us that the market move down was perhaps a touch overdone, considering that core operations are still presumably fine.

It’s not fun to see another offspring of the Big4 firm take a nosedive, but its better to take the hit now and find a road to survival, then continue festering longer and be completely wiped off the map. Having seen what transpired at Andersen in 2002, this seems like déjà vu all over again.

Courtesy By bigfouralumni

Climate change: what the UK needs to do to get results

Despite its potentially strong position in the renewable energy market, the UK must do more if it is to achieve climate change targets, says ACCA (the Association of Chartered Certified Accountants) in a new report called The future of renewable energy, which follows up a recent ACCA ‘Friday Forum’ event.

Vicky McAllister, ACCA’s sustainability adviser, explains: “In terms of its investment potential in renewable energy, the UK needs to do more if it is to achieve EU ‘202020’ targets. Investment in renewable energy and low carbon technology is key if the UK is to meet its share of the commitments.”

The main points of the paper are:

• The UK is not taking advantage of investment potential in renewable energy technology, despite having good resources and a number of strengths in the industry
• The UK, along with other EU countries, has committed to meeting its share of the ‘202020’ commitments
• One part of meeting targets is increasing the proportion of renewable energy in the energy mix
• Key elements of a global policy framework for a ‘green new deal’ include effectiveness, efficiency and equity: ‘the three E’s’

Dimitri Zenghelis, climate change economist for Cisco and senior visiting fellow at the LSE’s Grantham Research Institute on Climate, who was one of the speakers at the event, said:

“More needs to done by the Government and businesses in the UK to ensure that the UK’s renewable energy opportunities are properly utilized. Currently, the UK is not taking full advantage of investment potential in renewable energy technology”.

For more information about ACCA’s ‘Friday Forum’ events, and for further information on ACCA’s work on sustainability, please go to: www.accaglobal.com/sustainability

- ends -

Notes to Editors
1. ACCA is the global body for professional accountants. We aim to offer business-relevant, first-choice qualifications to people of application, ability and ambition around the world who seek a rewarding career in accountancy, finance and management. We have 362,000 students and 131,500 members in 170 countries worldwide.
2. ACCA has worked with governments, national organisations and development agencies in emerging economies- for over 20 years- promoting the accounting profession, to create value for the communities, businesses and individuals it serves.
3. ACCA believes that globalisation of business means that one set of reporting standards is essential. We favour the principles-based IFRS.
4. ACCA understands the real issues facing small businesses as 63,000 of our members work in SMEs or small partnerships worldwide.
5. ACCA’s next Friday Forum is on ‘USA Climate Change Policy’ and is being held on 17 July 2009.

Courtesy By ACCA

Glaxo to Face Suit over AIDS Drugs

AIDS Healthcare Foundation (AHF), the largest non-government provider of health care services for US patients with HIV/AIDS, is expected to file suit against the US arm of GlaxoSmithKline alleging that several patents for its AIDS drugs are invalid, and that it has abused a monopoly in pricing those drugs. The lawsuit, expected to be filed in the US District Court for the Central Division of California, Western Division, alleges that Glaxo's prices for AIDS drugs such as Ziagen, Epivir, AZT and Retrovir "exorbitantly exceed its costs of licensing, manufacturing and distributing," and so "present a formidable obstacle for proper treatment of the AIDS epidemic in the [United States]," according to a draft copy of the lawsuit.

"We believe we have valid patents for our products," said a Glaxo spokesperson. Glaxo and other makers of AIDS drugs have cut prices by 90 percent or more to many poor nations. Now, AIDS activists are aggressively pursuing similar price cuts for the US market. Glaxo is one of the biggest manufacturers of AIDS medicines. Last year the British company said sales of its AIDS drugs rose 14 percent to $1.76 billion. Activists targeted Glaxo especially because the prices of some of its AIDS drugs in developing countries are twice the prices charged by rivals such as Merck and Bristol Myers-Squibb. Glaxo has said it makes no profit on those sales and that its prices reflect the cost of manufacturing.

AHF, which operates AIDS clinics and pharmacies that provide drugs to patients in the United States, Uganda and South Africa, said that it would seek triple damages of $66 million from Glaxo, based on AHF's drug purchases from Glaxo totaling $22 million over about four years. The group said its recent negotiations to persuade Glaxo to lower its prices in the United States faltered. Glaxo also declined to fund a program to provide free AIDS drugs in Uganda, South Africa and elsewhere, said AHF.

AHF claims that AZT, Epivir and Ziagen were developed with significant amounts of US government funding and, under US law, should be sold at more reasonable rates. Glaxo "didn't discover these drugs, and they are charging too much money for them," said Michael Weinstein, founder and president of the foundation.

Allders hits Alexon for £3m

Clothing retailer Alexon has admitted that £3m will be knocked off its profits this year as a result of the collapse of Allders, the stores where it ran 118 concessions.

The admission came as the company announced disappointing results and said current trading had worsened.

Group sales in the past nine weeks have fallen 3pc, with sales at its high street stores down about 6pc. The group has been particularly hit by poor sales at its youth fashion chain Bay Trading.

The company refused to blame the weather. Robin Piggott, finance director, said: "We were trimming the value of our garments, making them cheaper and cheaper but less interesting."

John Osborn, chief executive, said: "I've stood up Japanese-style and apologised for the sales fall but I'm not going to be slitting my wrists."

Analysts expressed surprise at the size of the hit from Allders. John Stevenson at Shore Capital said: "Alexon has over 1,000 concessions, with only 118 of those at Allders.''

Mr Piggot said the £3m related in part to making redundant 250 Alexon staff who worked at Allders. Group pre-tax profits fell 8pc to £26.9m on sales up 2pc to £424m. A final dividend of 5.67p will be paid on June 30.

AIG staff tried to destroy documents

New chief admits AIG staff tried to destroy documents By David Litterick in New York Published: 12:01AM BST 05 Apr 2005 The new chief executive of embattled insurer American International Group yesterday admitted that employees of the company had been found trying to destroy documents as he sought to allay concerns over the ever-expanding inquiries into the business. In a letter to shareholders, British-born Martin Sullivan said: "AIG recently became aware of efforts to remove documents and information from its Bermuda building without permission. AIG immediately brought these incidents to the attention of the relevant authorities. One individual in Bermuda was terminated for failure to co-operate with AIG's review and several other employees have resigned." Related Articles Civilian police employee shot during 'gun awareness' training Sir David Walker to shake up bank boards MPs' expenses: Sir Alan Haselhurst in angry exchanges with fees office Exporters given help to increase trade in Budget 2009 Sunsail abandons Turkey over visa rowHe said the company was working with regulators in New York, Bermuda and Ireland to ensure documents that could shed light on the company's transactions are secure. Regulators have been particularly interested in some of the deals AIG did with off-shore companies. Irish regulators confirmed yesterday that they had been looking into deals involving AIG and Cologne Re, a division of Berkshire Hathaway's General Re that has an office in Dublin. Irish Financial Services Regulatory Authority chief Liam O'Reilly said he was "actively engaged" with Cologne Re and was working to ensure all "necessary corrective actions are taken". Mr Sullivan wrote: "We are working round the clock to complete our internal review as quickly and thoroughly as possible. AIG will continue to co-operate fully with all relevant authorities in their investigations. He added it was "unfortunate that current circumstances have obscured the reality that AIG's unique global franchise is sound, our financial position is solid and cash flow remains strong." The shares have fallen nearly 30pc since regulators issued subpoenas in February. News that some at AIG in Bermuda had been attempting to remove documents a week ago is thought to have infuriated New York attorney general Eliot Spitzer, whose investigation into the entire insurance industry sparked the current problems at AIG. It is understood that he had threatened to indict the whole company if action wasn't taken - a warning that led to the resignation of Maurice Greenberg as non-executive chairman. Meanwhile, Starr International, a private company that controls about 12pc of AIG's shares, has ousted a number of AIG executives, including Mr Sullivan and AIG chief operating officer Donald Kanak.

MG Rover For £10 in May 2000

BMW dashed hopes that MG Rover would get additional funding yesterday, claiming its troubled former British subsidiary would get nothing more than the £500m loan agreed when the Phoenix Consortium bought Rover for £10 in May.

Werner Samann, a BMW board director and former head of Rover, speaking at the Birmingham International Motor Show, said: "The balance sheet will not change dramatically from the £740m of transfer assets agreed on May 9.

"All the risks are with the new owners. Some circumstances may have changed - the 'rip-off Britain' campaign and the fuel crisis. But this is the risk of the entrepreneur. That's the responsibility of the new owner."

The two companies are due to agree on "completion accounts" (Rover's final balance sheet) by the end of the year. MG Rover's new chairman, John Towers, is understood to have been pressing the German company for more cash on the back of falling car prices, plummeting sales and the weakening euro.

The "rip-off Britain" campaign has hit the value of the 50,000 Rover cars the Phoenix Consortium inherited from BMW. These stocks were valued at £740m in May. Since then, Rover has cut its new car prices twice and seen its sales drop by as much as 44pc in a single month. At the same time,the euro has plunged to new depths versus the pound, further hurting MG Rover's business.

A spokesman for BMW later said that if Mr Towers contested the completion accounts, BMW and MG Rover could end up in court. The two companies would first attempt to reach agreement via an independent arbitration process. However, if this fails they would go to court to settle the final accounts.

MG Rover said: "The terms of the Rover BMW deal are confidential but Rover is not expecting any more money than that provided for in the May agreement."

Since the sale of Rover and Land Rover, Professor Samann has been responsible for disentangling the two businesses from BMW. He said MG Rover's recent claim in a regional newspaper report that it would buy BMW's British power train operation, which makes engines and gearboxes for Land Rover and Rover, was "wishful thinking".

He said: "There are several international companies which are interested in the power train business. MG Rover is one of those businesses." Land Rover's new owner, Ford, is understood to be keen not to see the power train operation pass into MG Rover's hands.

The comments by BMW come at a difficult time for MG Rover. Two of the company's non-executive directors, David Bowes and Terry Whitmore, announced earlier this week they would form their own car venture, separate from the Rover project, suggesting dissatisfaction with Rover.

MG Rover said yesterday the venture between Mr Bowes, who heads the sports car maker Lola, and Mr Whitmore, of Mayflower Vehicle Systems, was not a "rival venture" to MG Rover but just "an extension of their existing businesses".

Since selling Rover and Land Rover, BMW's British operation has been reduced to the Mini and two new factories, an engine plant in Hamshall, which begins production at the end of next year, and the new Rolls-Royce factory near Chichester, which will open in 2003.

Courtesy By Telegraphe

ACCA to launch ICFE Qualification

ACCA to launch International Certificate in Financial English (ICFE) Qualification

ACCA Pakistan is launching International Certificate in Financial English (ICFE) Qualification in Pakistan this week (20 – 27 July 2009). During the week, ACCA will undertake a series of activities including presentations to well-known organisations in the IT, telecom, banking and FMGG sector and educational institutions.
Other activities include radio show, free pre-testing for ICFE exams and seminars at ICFE tuition providers including School of Business Studies, College of Accounting & Management Sciences, Centre for Financial Training & Research and Berlitz in Karachi.  These institutions are offering ICFE tuitions and test preparatory classes for students and professionals.
The ICFE Qualification is jointly developed by ACCA (the Association of Chartered Certified Accountants) and University of Cambridge ESOL (English for Speakers of Other Languages) Examinations. It comprehensively develops ability across the four skill areas of reading, writing, listening and speaking. ICFE is particularly relevant for finance and accountancy professionals needing to perfect their financial English skills or for finance and accountancy students preparing for professional exams or individuals required to present and interpret financial information. ICFE exams will be conducted by British Council Pakistan.
We take pride in sharing with you that Cambridge ESOL examinations are recognised by over 50 well reputed organizations in UK including Pricewaterhouse Cooper, World Bank, KPMG and Procter & Gamble. In Pakistan, ICFE has been endorsed by ICI Pakistan, PTCL, Packages Ltd and Khushhali Bank.
Arif Masud Mirza, Head of ACCA Pakistan says: "Being the international language of finance and accountancy, it is vital for professionals to have first-rate financial English language skills and the ability to communicate confidently with colleagues from the international business community".

Courtesy of ACCA Pakistan

Soaring Executive Pay Attacked by Shareholder Activists

Peter Rose, a Seattle-based corporate chief executive offficer, took home $4.7 million last year. He thinks that’s quite enough. “There's only so much crap you can buy,” he told his hometown newspaper. His colleagues in corporate America seem not to agree. Last year, the CEOs of the 500 biggest U.S. companies averaged $15.2 million in total annual compensation, according to Forbes business magazine’s annual executive pay survey. The top eight CEOs on the Forbes list each pocketed over $100 million.  Larry Ellison, CEO of business software giant Oracle, was not in the top eight. But as the 11th richest man in the world, who ended last year worth more than $16 billion, he is not doing badly. University of Chicago economist Austan Goolsbee points out that a CEO like Ellison literally cannot spend enough on personal consumption to stop his fortune from growing. Goolsbee calculates that Ellison would have to spend over “$183,000 an hour on things that can’t be resold, like parties or meals, just to avoid increasing his wealth.” Stunning numbers like these have moved executive pay onto America’s political radar screen. In a “state of the economy” address earlier this year, even President George W. Bush took note. “America’s corporate boardrooms must step up to their responsibilities,” the President proclaimed to a business audience. “You need to pay attention to the executive compensation packages that you approve.” At corporate annual shareholder meetings held across the U.S., activist individual and institutional investors have tried to encourage the process. They introduced resolutions designed to curb executive pay excess and, at one annual meeting after another, directly challenged presiding CEOs.  In May, at the annual meeting of the Denver-based telecom Qwest, high school teacher Linda Baggus — annual salary: $55,000 — wanted to know how CEO Dick Notebaert could justify his annual earnings, estimated at $33 million by one Midwest daily newspaper. “How is the service that you render so much more valuable than the service I render?” she asked. Notebaert gave the standard corporate defense for American CEO pay levels. Life at the Top: Consuming Interest How do CEOs spend their paychecks? In a way, just like everyone else, except more so. Quite a bit more so. Take housing, the largest single expenditure households make. Dwight Schar, the CEO of construction industry giant NVR, shelled out $70 million three years ago for his new home in Florida's Palm Beach. His beachfront manse features 18 bathrooms, a movie theater, and a walk-in humidor for cigars. The most expensive private home sold in the United States last year went to Richard Kurtz, the CEO of Advanced Photonix, a telecom supplier, for $58 million. Last year Rich Zannino, CEO of publisher Dow Jones, spent $173,441 getting to work. Dow Jones reimbursed him, on top of his $4 million-plus salary. That didn’t please the war correspondents on the Wall Street Journal, a Dow Jones property. In a protest letter they said their CEO “gets far more just to sit in the back of a limo on his way to work than we get to go into combat.” CEOs, naturally, also need bling. A recent study by Prince & Associates says banking industry executives who took home over $5 million in bonuses last year spent 16 percent of their good fortune on $31,000 Patek Philippe watches and other fine baubles. One Wall Street bling shop sits conveniently near financial powerhouse Goldman Sachs, whose CEO, Lloyd Blankfein, last year took home $53.4 million. The shop stocks $700 cigar lighters and a $320 cigar clipper. His pay, he explained, depends on his “performance” and reflects the realities of a “very competitive market” for executive talent. His defense carried the day. Four shareholder resolutions designed to clamp down on CEO pay excess failed to win majorities at the Qwest meeting. In early June, activists figured they would do better at the annual meeting of Yahoo, the global Internet giant headquartered in California’s Silicon Valley. The situation appeared to offer reformers all they needed: a CEO at the top of the pay charts; lackluster corporate performance; many angry shareholders. In 2006, Yahoo shares had sunk 35 percent, or about $20 billion, in value. Top talent, according to press reports, was jumping ship. A leaked internal Yahoo memo -- known in tech sector circles as the “Peanut Butter Manifesto” – said that, like peanut butter on toast, Yahoo management was spreading the company dangerously thin. Thinner, certainly, than the bulging wallet of CEO Terry Semel. Last year Semel pocketed $71.7 million, over twice the take-home of any other chief executive in Silicon Valley. Since 2001, the year he left Hollywood to take Yahoo’s top slot, Semel has cashed out an additional $450 million in personal stock option profits. By early June, three major shareholder advisory companies – which advise large investors how to vote at corporate annual meetings – had had enough. They urged a “no” vote on the re-election of three Yahoo board members who had served on the company’s executive pay committee. One of the three companies, Proxy Governance Inc., noted that Semel’s compensation was running 926 percent “above the median paid to CEOs at peer companies.” Semel walked into Yahoo’s June 12 annual meeting prepared to counterattack. “Yahoo has staked out a strong competitive position and we are better positioned than we have ever been before,” he pronounced. Activist shareholders disagreed. “I am surprised you did not apologize to Yahoo shareholders for the last three years of performance,” said one, Florida money manager Eric Jackson. There were no apologies. Instead, Semel and his management team prevailed in every executive pay-related vote they faced. Only a third of the Yahoo shareholder vote opposed the re-election of the targeted board members. Performance: Games Executives Play CEOs who “perform” deserve their rewards, corporate boards in the United States like to point out when asked to justify current levels of executive pay. But almost all the measurements — or “metrics” — used to determine who’s performing well can be adjusted to create phantom successes. What sort of games do savvy executives play? Here’s some samples. Stock Buybacks IBM and many other major companies use “earnings per share” to measure performance — and pay. The quickest way to hike earnings per share: a company merely “buys back” shares of the company’s own stock on the open stock market. With fewer company shares outstanding in the marketplace, a company’s “earnings per share” can jump, even if overall company earnings stay flat. IBM's corporate board authorized $15 billion in new buyback spending this spring. That's “two and a half times what IBM spends annually on research and development,” the Associated Press reported. Channel Stuffing Some companies rate performance by sales totals. Executives who need to hit a particular sales target by the end of a fiscal quarter can inflate sales by giving retailers incentives to buy more than they are likely to sell. The retailers later return the unsold products — after the executive has personally profited from the inflated sales. Drugmaker Bristol-Myers Squibb inflated earnings for nearly three years by getting wholesalers to keep placing big orders. This "channel stuffing" kept sales booming and the company's share price rising. CEO Charles Heimbold parlayed this inflated share price into a stock sale that fetched him $23.6 million. Option Expensing Many companies measure performance by profit margin, a company’s earnings after deduction of expenses and taxes. Companies routinely push up this profit margin, a U.S. Senate hearing revealed in June, by manipulating executive pay to lower corporate tax bills. Under current U.S. law, corporations that award executives stock options can deduct from their taxes far more money than the options cost them. In 2004, says Senator Carl Levin from Michigan, top U.S. companies used this maneuver to save as much as $15 billion in taxes. Since 1993, Occidental Petroleum has claimed $353 million in tax deductions for stock options that went to the company’s CEO. The total that would have been deducted if reforms sought by Levin had been law: $29 million. A resolution seeking to tie Yahoo executive pay to a more competitive performance standard lost by the same two-to-one margin. A crushing setback for shareholder activism? Not exactly. The week after the annual meeting, the Yahoo corporate board announced Semel’s resignation. Had shareholder activists triumphed over executive pay excess? Well, Semel may be out, but CEO pay remains on the rise. If Yahoo’s next CEO takes home the same half-billion over six years as Semel, will Americans concerned about executive pay have reason to cheer? Margaret Covert doesn’t think so. Covert coordinates shareholder activism for NorthStar Asset Management, a Boston-based wealth management company. “It comes down to having a company share its bounty with all its workers,” she told CorpWatch. “All workers have contributed to company success. They should all share in the rewards, not just the top tier.” NorthStar asked shareholders of ExxonMobil, the world’s most profitable corporation, to call on the company to prepare a study that compares the “total compensation package of our CEO and our company’s lowest paid U.S. workers in September 1995 and September 2005. “As shareholders,” the proposed NorthStar resolution read, “we are concerned that the over-compensation of top executives has a negative effect on employee morale and customer trust.” NorthStar president Julie Goodridge carried the resolution to the May 30 ExxonMobil annual meeting at the Morton H. Meyerson Symphony Center in Dallas, reminding the thousand or so shareholders present that CEO Rex Tillerson took home just over $22 million in 2006. “Our resolution asks shareholders to join us in questioning why it takes our lowest-paid employees a full year to earn what Mr. Tillerson earns for an hour on the job,” Goodridge said, “… because we believe it is fiscally irresponsible for a company to put so much of its resources into a single individual. “High company profits do not justify outrageous CEO compensation.” No shareholders spoke in favor of Goodridge’s resolution. She claims ExxonMobil officials structured the annual meeting so that they could not do so. “At ExxonMobil’s meeting last year, people could get up and make statements on behalf of resolutions they supported,” she explains. “The mikes were set up in the audience, and you could just line up at a mike and have your say.” This year, she says, Exxon allowed only the sponsors of a resolution to make a statement: “It felt like a much more hostile meeting than last year.” The NorthStar resolution gained just under 12 percent of the shareholder vote.  A resolution in a similar vein also made little headway at the annual meeting of retail giant Wal-Mart. The resolution asked why the company’s top five officers, who make up 0.000003 percent of the company’s workforce, were pulling in 18.2 percent of the total stock options Wal-Mart granted each year. “If options are a good incentive to get people to do a good job,” says Mike Lapham, director of Responsible Wealth, a national group that links affluent individuals from across the U.S. and which introduced the resolution, “why not use them for employees on the store floor, too, and help the women and people of color who work at Wal-Mart build their assets?” The environment at the annual meeting didn’t encourage serious debate on such a deep question. Lapham describes the meeting as more like a pep rally than a business gathering, with 15,000 of Wal-Mart’s most enthusiastic employees — “associates,” to use the official company term — packed into the University of Arkansas basketball arena for a four-hour entertainment extravaganza that featured the comedian Sinbad. “The shareholders resolutions come up when the employees take a bathroom break,” says Lapham. Top Wal-Mart officials never came forward to debate the Responsible Wealth resolution — or any of the other three resolutions that sought to challenge the company’s executive pay practices. They left their defense of pay arrangements to the explanations of corporate policy in the official annual meeting documents. “Our associates respect that Wal-Mart has a well-recognized culture of opportunity,” the documents stated. “They are proud that their CEO started as a manager in the trucking division and has stayed with the company for 28 years.” The Responsible Wealth resolution collected about the same support as the NorthStar initiative at ExxonMobil. However, executive pay resolutions at other corporate annual meetings in recent months have fared better. U.S. trade unions pushed particularly hard this spring for “say on pay” resolutions designed to give shareholders the right to take annual advisory votes on executive pay packages. This right is now enshrined in law in Australia, Sweden and the UK. In the Netherlands and Norway, shareholders have the right to take a binding executive pay vote. CEO Pay: Defense is the Best Form of Attack Corporate boards in the United States have evolved a consistent, all-purpose defense of the executive pay status quo. In an explanation that chimed with other statements throughout Corporate America, the executive compensation committee at Toll Brothers, Inc., a major residential construction company, said earlier this year that it had based executive pay “on the principles that compensation should reflect the financial performance of the company and the performance of the executive, and that long-term incentives should be a significant factor in the determination of executive officers’ compensation.” On top of that, the company “sets executive compensation at levels that are sufficiently competitive so that the company will attract, motivate, and retain the highest quality individuals to contribute to the company’s goals, objectives, and overall financial success.” How does that work in practice? Toll Brothers CEO Robert Toll earned $29.3 million in 2006. Was that a suitable reward for performance? The company's net income last year fell 15 percent.   Or was the $29.3 million intended as an incentive that would stimulate Toll to do better in the future? Toll owns nearly a fifth of the 5,500-employee company's outstanding shares of stock, so seems already to have enough incentive to want the company to do well. Or is $29.3 million the “sufficiently competitive” going rate for CEOs in homebuilding? It doesn’t seem so. Over the past three years, Robert Toll has taken home almost seven times more than his CEO counterparts in the homebuilding industry. Last year only a half-dozen advisory “say on pay” resolutions were tabled at annual meetings. This year, “say on pay” debates have erupted at nearly ten times that number of annual meetings, and most have attracted 40 percent or more of shareholder votes. Four even won majorities — at Blockbuster, Ingersoll-Rand, Motorola and Verizon. Shareholder activists hail the results as significant.  Until recently, explains veteran shareholder organizer Tim Smith, only church groups and labor and public employee pension funds seemed willing to challenge management on executive pay. That’s changed, says Smith, a senior vice president at Walden Investment Management and chair of the Social Investment Forum, the top U.S. trade association for social investors: “You don’t get 35 percent of a shareholder vote without some big institutional investors saying no.” Major institutional investors, such as the T. Rowe Price mutual fund family, are now eager to give shareholders “the tools they need to hold corporate boards of directors accountable,” adds Dan Pedrotty, director of the AFL-CIO’s office of investment, the coordinating center of American labor’s shareholder activism. “We’re becoming more of a critical mass,” agrees NorthStar Asset’s Julie Goodridge. “It’s one thing when an investor with a few thousand shares objects - quite another when an investor with millions of shares stands up.” In Plano, Texas, some of those investors stood up at the May 18 annual meeting of retail giant J. C. Penney, which last year handed $10.2 million in severance pay to an executive who had spent only six months in the job. Shareholders passed a resolution, sponsored by the Bricklayers Union, asking company management to secure shareholder approval in advance for any future severance package that exceeds an executive’s regular annual salary and bonus by 2.99 times or more. The J. C. Penney corporate board is not obliged to implement the resolution, because shareholder resolutions at U.S. annual meetings typically function only as recommendations. Reformers acknowledge that corporate boards already ignore public frustration over rising executive paychecks. “We’re disappointed to see packages continuing to spiral upward,” Service Employees Union corporate activist Tracey Rembert told CorpWatch. “The lump sum numbers now public under the new SEC disclosure rules have been shocking.” Last summer the SEC (the federal Securities and Exchange Commission) promulgated regulations requiring publicly traded companies in the U.S. to reveal previously largely hidden categories of executive compensation. Among the surprises the new SEC regulations have helped bring to light: the $415.5 million in 2006 take-home for Occidental Petroleum CEO Ray Irani. He pocketed $52.1 million in salary, bonus, perks and stock awards and cleared another $270.1 million cashing out stock options awarded in previous years. And he withdrew another $93.3 million from his Occidental “deferred pay” account. Some observers had predicted that the SEC regulations would help curb executive compensation increases. Certainly, shareholders have more information than ever before. Nevertheless, executives and corporate boards still enjoy a huge advantage in the ongoing debate because both they and the critics share an assumption that executives who perform well deserve to be rewarded.   “Pay should be linked to performance, that’s the common denominator,” says Walden Investment Management’s Tim Smith. “Nothing will raise investor ire more than if pay does not seem to be linked to performance.” Executives have learned how to spin performance statistics to deflect attacks. Angelo Mozilo, for instance, has collected over $285 million in the last 11 years as CEO of Countrywide Financial, the largest U.S. home mortgage lender. At Countrywide’s annual meeting in May, Mozilo presented a list showing that Countrywide was 12th in a list of U.S. companies that had generated the greatest returns for shareholders. That placed it ahead of corporate giants Dell and Berkshire Hathaway whose top guns, Michael Dell and Warren Buffett, he noted, had both become  “multibillionaires.” Mozilo’s not-so-subtle message to shareholders: At $285 million, I’m a bargain. Executives usually have little difficulty finding some “metric” that proves they have performed well and richly deserve generous rewards. Corporate board executive compensation committees make metric cherry-picking easy. They will often cite, Tim Smith notes, a long list of metrics that guide their determination of performance, but leave unclear which performance measurements matter most.  In this spring’s round of corporate annual meetings, the Carpenters Union led an effort to clamp down on performance metric gamesmanship. The Carpenters and allied groups pushed a resolution asking corporate boards to benchmark their performance standards against competing firms. The goal: no windfalls for executives whose companies fail to beat their competitors. The approach proved a hard sell. The failure of every “pay for superior performance” resolution to gain a majority in shareholder voting has become a basic fact of life for corporate activists. So what keeps these activists coming back to shareholder meetings, year after year, when they usually have so little to show for their efforts? Scott Klinger, research director of Corporate Accountability International and a veteran of the annual meeting scene since the mid-1980s, emphasizes that annual shareholder meetings play a unique role. Every other day of the year, Klinger says, CEOs live in their own separate universe. “Corporations now require their top executives to fly on corporate aircraft for security reasons,” he explains. “They never even get to meet first-class passengers. They come to believe they’re special. They never see real life.” Activists like Responsible Wealth’s Mike Lapham are working to bring that real life into annual meetings. Earlier this year, deep-pocketed members of Responsible Wealth joined TIGRA (the Transnational Institute for Grassroots Research and Action) in a campaign to press Western Union to lower the fees the company charges immigrants to send remittances home. Activists at the Western Union annual meeting accompanied immigrants with troubling stories to tell about how remittance fees were squeezing their families. Lapham says Western Union executives came face-to-face with people they would never otherwise encounter. “Moments like that,” he observes, “are one of the rare times executives ever get to hear the downside of how they’re making their money.” Activists at this spring’s corporate annual meetings weren’t able to accomplish anything that will immediately staunch the flow of money into executive pockets. But they will return next year. The tide, most seem convinced, may be turning — and now’s no time to turn back. Courtesy By Sam Pizzigati