Friday, 24 April 2015
Wednesday, 18 June 2014
Wednesday, 24 April 2013
Saturday, 19 January 2013
With these anxieties in mind, and ahead of the CPO AGM later this month I have obtained an up to date copy of the shareholder register and analysed it. Broadly my conclusions are that the new shares seem likely to be going to the right types of new shareholders:
- of the 384 shares issued since summer 2012, around 280 have gone to people buying 1 or 2 shares each; that's over 70% to 'small' shareholders
- contrast this to the period before the contentious 2011 EGM when 80%+ of the 2500+ shares issued went to people buying 10 or more shares, in fact mostly to those buying 50-100
- of the recently issued shares only one holder bought more than 10 (he bought 50), another bought 10, and two members from the same family bought 10 between them; everyone else bought 5 or less
- it should be noted that it is possible that some of the extra shares issued have gone to existing shareholders to raise their stakes above 10 shares, but I couldn't find any in a quick search
- none seem to have gone to the people linked to the club who bought shares in October 2011; none of the new larger buyers appear to be connected to the club, although again this cannot be certain
As a result I will be voting in favour of allowing the CPO to issue up to another 1000 shares in the next year. This is not without risk (ultimately the club will know before we do whether a new vote on moving grounds is imminent, and could snap up available shares at short notice), and it would be good if the CPO board set out its plans to counter this (eg how are new applicants vetted?), but on balance I think it is a risk worth taking.
Which leaves it up to ordinary Chelsea fans, who are being reached via CPO adverts in the match day programme and season ticket renewal mailings, to take the opportunity to buy a share or two. That way the future of the club's ground will be in the hands of genuine supporters.
I'd urge all CFC fans, and especially current CPO shareholders, to encourage those they know to get involved and buy a share.
Friday, 1 June 2012
Thursday, 23 February 2012
‘What we’ll do is create a system under which our most successful and knowledgeable people are highly incentivised to…. err…. quit…’
No, this isn’t another bleating businessman complaining about the 50% tax rate. Quite the opposite in fact. My view is that tax rates are too LOW in one critical area: capital gains tax for entrepreneurs which runs at 10%.
We are frequently told that new businesses are a great source of growth, that they create new jobs and help society. I imagine that’s true at the macro-economic level (although no-one ever seems to mention that new businesses normally expand at the expense of old ones, that a new job at Amazon means less people working at HMV shops – this is the fundamental competitive nature of economic growth).
Having started one company and worked with numerous entrepreneurs I can confirm that creating new businesses requires very considerable skill and effort. Most fail, a number just about get to the level where they break-even for the hard work put in, and a small number really flourish.
This latter group is where the pay-off lies, in terms of jobs and long-term success. Maybe five years down the track the owner, who has probably risked everything financially, worked 60-80 hours a week and not taken more than a week’s holiday a year, is finally seeing a financial return. S/he will probably not get a big salary or bonus, but can start to take out sizeable dividends – maybe £250,000 a year or more.
Then comes the hammer blow. On that £250,000 they’ll pay around 50% tax, maybe more. Fair enough in these straightened times. Or, they could leave the cash in the business, find a buyer and pay 10% tax. Even at a modest price for their business this can have the effect of making a sale of the business the equivalent financially of 10 or more years’ dividend. Why slog on when the tax system basically incentivizes you to sell out?
The result is that up and down the country very capable, hard-working and successful business owners are throwing in the towel. The businesses they run may continue to do well after they sell out, but there is a tremendous loss of knowledge and expertise as the new owners take it on.
Saturday, 28 January 2012
In the lucky life that I live both my children have gone to private primary schools, and will similarly continue their independent sector education at secondary level. For the last few years we have had a seemingly continuous set of important checkpoints as they have gone through school test, interviews and entrance exams that will determine where they will go. Realistically all the schools they might attend are good, but the 'better' ones have a higher success rate in getting in to top universities, the next stage of the educational conveyor belt.
Neither of our kids seemed too bothered about where they would head, until they reached the age of nine. Then, almost as if a switch had been flicked, they both set themselves challenging targets for which schools they wanted to go to. They were clearly influenced by the league tables, and by the perceived pecking order amongst their peers. No doubt they also reflected our values as parents - we would support them come what may, and are happy for them to aim high even if they subsequently fail. We also see academic success and discipline as a good thing.
So they worked hard, REALLY hard. They had tutors to assist them. They volunteered for more difficult homework when given a choice. They developed their extra-curricular activities as these would help them in interviews. Sometimes they got stuck, tired, or seemed to fall behind. But mostly the challenge was satisfying, maturing and, frankly, an excellent distraction from computer games.
So how did they do? The results are not all in, but they did fine. But the most interesting thing is that they ended up no higher up their class than before. How come? Because all the other parents did the same thing. The whole class improved enormously as a result of pupil, parent and teacher effort.
This, of course, was true of all the other candidates - effectively all 500 applicants for the 100 slots at each school had put their backs in to it. No one was individually any better off by the end of a couple of years of intense preparation; but the overall standard of the group was way ahead, and the kids had all learnt how to work towards a goal, to learn some useful skills, to stick at something worthwhile, to struggle with it and, ultimately, to get in to a good school.
Inevitably I know relatively little about the equivalent selection process for state schools, and it is always dangerous to blog about a subject where you have limited knowledge. I’d be grateful for feedback on this attempt at extrapolating the benefits of competition in private schools to admissions for the majority of children.
As I understand it, with a few exceptions, admission criteria for government funded schools must NOT include capability or potential. No interviews are allowed. There are better and worse schools, and parents clearly know this, but with the exception of religious discrimination, pretty much all a family can do to manipulate the system is to try to move closer to their favourite school.
There is no incentive to study hard; no reward for parents who help with homework. A kid in a poor area with poor schools can't get to a good school in a better area by applying themselves. Richer families in nice areas get their kids in to nearby good schools, even if they are lazy academically.
Worse still the group as a whole has no incentive to improve to their full potential, leaving them all at a lower level.
I’m not arguing here for a return to grammar schools, where the top 10% were creamed off; I’m not suggesting that academic performance should be the only criteria for admission (personally I prefer potential as the main driver). But imagine a world in which all state schools held an entrance exam, however good they are. Even if your kid was only aiming for a mid-rated school you would have a substantial incentive to have them work hard and strive for improvement, for fear they end up in the worse local school.
And the logical effect should be that, rather than improving parental skills at pretending to live close to the good school, most kids would shift up a level in terms of performance and work ethic – surely a useful outcome.