Marmite Monarchy: 10 Things We Learned This Week

You Either Love or Hate Executive Pay

That wasn’t the only shareholder rebellion this week. Shareholders have also rejected Unilever’s pay policy, which would have handed chief executive Alan Jope collect around €5.1 million (£4.5 million) this year – a 42% increase over two years. Around 58% of shareholders voted it down – although this is an advisory vote so theoretically the company, which manufactures goods from Marmite to Magnums to Domestos, can ignore it and splash the cash. Will Unilever dare? It has recently been on the back foot defending itself against accusations it is "profiteering" from inflation. These rebellions indicate shareholders are clearly emboldened on a number of ESG issues, from climate pledges to fair pay.

Discount Supermarkets Are Heading Upmarket

Shopping habits are changing, with the number of Lidl and Aldi outlets in leafy suburbs and other middle-class areas doubling in the last five years. This would indicate wealthier households are perhaps less loyal to Waitrose and Sainsbury’s than you would’ve thought, and that the "middle aisle" has a great deal of appeal. But it’s also about the cost of living, which can be mitigated simply by not buying as much camembert. When these German discounters first appeared in the 1990s, they were predominantly based in areas where household income was below the national average. But latest figures how that more than quarter of new stores opened last year were in areas with “above average” incomes – Including prime London locations like Chelsea and Knightsbridge.

Cold Calls Are Getting The Cold Shoulder Again

The UK government is "getting tough" with fraudsters, with a blanket ban on cold calls on all financial products. It is hoped this will stem the growing number of unregulated cryptocurrency schemes and fake insurance scams. Of course, the government introduced a similar ban on pension cold calls back in 2019, after lobbying for the move began as far back as 2016. Pension scams haven’t entirely disappeared in the meantime, though hopefully people are a little less trusting when it comes to unsolicited calls promising a free pension review. More important is the apparent news that the ban will be backed by a new financial fraud squad which will have 500 investigators. A freedom of information request revealed this week that less than a third of pension scams reported to Action Fraud are passed on to the police for further investigation.

AI’s Pioneers Already Have Regrets

Just because you can, doesn’t mean you should. Geoffrey Hinton, the so-called godfather of artificial intelligence, didn’t paraphrase Jeff Goldblum’s famous line from the first Jurassic Park movie when leaving Google this week, but he certainly could have. Hinton is retiring, but in a parting shot he warned about the dangers lying ahead from the mis-use of AI. His stark words have been echoed by Microsoft’s chief economist Michael Schwarz, who told the World Economic Forum that while the tech giant was committed to making AI safe, there was a very real prospect that the technology would cause damage. Schwarz did, however, downplayed suggestions AI will cause widespread job losses, calling such claims "paranoid". Technology like Microsoft’s ChatGPT should make people more productive, he said, so it’s not all over just yet.

And AI is Already Causing Share Sell-Off Fears…

We are clearly a long way from a Terminator-style "rise of the machines" scenario yet, but it is clear AI will be a major market disrupter across many sectors. We saw this when millions of pounds were wiped off Pearson’s share price this week after fears that Open AI learning platforms might eat into its market share in the online learning sector. The investor sell-off came after a US rival, Chegg, admitted it was losing subscribers to AI platforms like ChatGPT. Pearson, which publishes academic text books as well as offering online study platforms, was keen to stress that it has a different business model to Chegg, with substantial revenues outside higher education. But this did not stop its share price dropping. We can only wonder what former Pearson backer Nick Train thinks.

AirBnb is Going Back to Basics 

Airbnb is the latest company to adjust its marketing strategy to reflect the fact we all have less cash to spend. This week it launched launched a new (ish) “rooms” category in homage to its original spare room rental portal — a clear departure from its years-long narrative about luxury homes and apartment holiday lets. This will be matched with a new “host passport” feature, which will allow visitors to get more information about their hosts. It all comes with a new slogan: “experience a city like a local, by staying with one”.

The FCA Has Finally Done Something Government Likes

UK politicians have long been worried about the lack of big-ticket listings on the London Stock Exchange, but after some high profile problems with Deliveroo and The Hut Group, they probably welcomed the Financial Conduct Authority’s latest edict this week, which proposed relaxing a number of rules in order to persuade more tech companies to seek a FTSE listing, rather than disappearing to the US. However, the FCA did admit it was holding a double-edged sword: making London more attractive to tech entrepreneurs may mean removing some investor safeguards. So investors may have a wider range of companies to invest in, but it could be a riskier market. Key changes include the scrapping of the "primary listing" category, widely seen as the "gold standard" when it comes to governance and transparency. The regulator also proposes allowing founders of newly-floated companies to retain power by allowing different share classes with different voting arrangements – potentially watering down shareholders' influence over company decisions.  

And it May be Helping Whistleblowers Too

Whether it likes it or not, the FCA does well to remember that scandals are often exposed when decent people with a conscience tell the authorities that companies are playing fast and loose with the rules. Having faced a torrent of accusations about apparent "failures" in dealing various high-profile whistleblowing cases, the FCA is now expanding on new rules to protect whistleblowers. In its own survey, the regulator admitted that many sharing vital information felt they were "not being heard" and often received little feedback on how the information was being used. The watchdog is now looking to build a more supportive environment However the regulator has recently been criticised for not acting promptly on this information. New rules though are designed to change this — and encourage more people to come forward. The FCA admitted that in its own survey, many of those sharing vital information felt ‘they were not being heard’ and often had little feedback on how this information was being used. The FCA is now looking to build a more supportive environment. Sounds good? It’ll come as little consolation to George Patelis.