Bank of England launches consultation on scrapping banker bonus cap
And as chancellor Jeremy Hunt prepares for a range of City reforms in a bit to spur growth, the Bank of England has launched the first of a raft of consultations: this time on the banker bonus cap.
Plans to scrap the EU cap were first announced during the September mini-budget, paving the way for bankers to earn more than 200% of their salaries in bonuses.
However, recruiters and bankers are sceptical that it will spark much change here in the UK – where bankers have grown accustomed to higher fixed pay, which by and large rose to compensate for the bonus cap which came into force in 2014:
However, the Bank of England said as part of the consultation:
The proposed changes should…help remove unintended consequences that have arisen as a result of the bonus cap, namely growth in the proportion of the fixed component of total remuneration, which reduces firms’ ability to adjust costs to absorb losses in a downturn.
Poll update: 57.6% so far vote for Musk to step down as Twitter boss
The proportion of Twitter users voting for Musk to resign as head of Twitter is climbing with 50 minutes left to go:
In a written statement regarding the UK spring budget, chancellor Jeremy Hunt has said:
Today I can inform the House that I have asked the Office for Budget Responsibility (OBR) to prepare a forecast for 15March 2023 to accompany a spring budget.
This forecast, in addition to the forecast that took place in November 2022, will fulfil the obligation for the OBR to produce at least two forecasts in a financial year, as is required by legislation.
BREAKING: UK spring budget to be held 15 March 2023
The chancellor, Jeremy Hunt, will deliver the spring budget on 15 March 2023, according to Reuters.
And for the avoidance of any doubt (given the controversy that followed the lack of forecasts alongside the disastrous mini-budget delivered by ex-PM Liz Truss and her chancellor Kwasi Kwarteng) the Office for Budget Responsibility has been commissioned to prepare forecasts alongside the presentation, Reuters adds.
Call it Chekhov’s Jet: a Twitter account placed on the mantelpiece in act one must surely go off in act five.
Seven days after buying the social network he tweeted that his commitment to free speech extended even “to not banning the account following my plane”. Six weeks later, his reversal of that policy set in motion a series of events that seems increasingly likely to end in his dramatic departure as chief executive of Twitter.
On Thursday, Musk banned the @ElonJet account, claiming to be spooked by an apparently unrelated altercation with a man who was stalking his ex-wife. On Friday, he suspended the accounts of a number of journalists who had reported on his move.
On Saturday, he suspended the account of Taylor Lorenz, a reporter at The Washington Post who had sent him a request for comment on the site, later claiming it was for “historical doxing offences”: breaking a rule that hadn’t existed when she broke it, with tweets that were no longer live on the site.
On Sunday, he reinstated her account, before immediately banning her permanently, for breaking another newly created rule: a ban on any promotion of accounts on other social networks, a policy apparently instated in a hurry over the weekend in an attempt to stem the flow of users leaving the social network for sites not run at the whim of a vengeful billionaire.
Like the old woman who swallowed the fly, each time Musk reacts to the problems he’s caused, he creates bigger and bigger problems for himself.
If his offer to step down is to be taken at face value, it would represent a rare moment of insight in his 50 days at the top of Twitter: the realisation that the only common cause of all of Musk’s problems on social media are Musk himself.
Tesla shares rise as clock ticks on Musk’s Twitter resignation poll
Telsa investors seem to pleased with the way that Musk’s Twitter poll is leaning towards his potential resignation, with shares up 4% in pre-market trading:
Economic data interlude:
The German Ifo business climate data for December shows confidence among the country’s firms rose more than expected, despite the energy crisis and high inflation.
The index rose from 86.4 in November to 88.6 this month.
A Reuters poll of analysts had suggested the reading would be closer to 87.4.
Musk poll: 57.4% so far voting in favour of his resignation as Twitter boss
A quick update on Musk’s Twitter resignation poll, which has now attracted 15.8 million votes with just two hours left to go:
Victoria Scholar, head of investment at interactive investor, says Musk’s Twitter controversies are compounding other issues for Tesla, which is already grappling with supply shortages and increased competition.
The electric carmaker has been one of the worst performers in US tech this year, down by more than 60% following a meteoric surge for the stock of more than 1600% from the 2020 trough to the peak in 2021.
Tesla has had the added pressure this year from Elon Musk’s Twitter acquisition which has distracted the billionaire, taking his attention away from the EV giant.
Even prior to the Twitter deal, Musk was already spreading himself very thinly with SpaceX, Neuralink, the Boring Company as well as Tesla.
It’s also worth remembering that Musk used his Tesla shares to help fund his $44bn takeover of Twitter, which has also caused concern among investors.
Musk has been using Tesla stock to fund his Twitter deal by selling a total of $22.9bn worth of Tesla stock this year in another sign he is taking his eye off the ball and weighing on investor confidence.
Tesla has had a series of headwinds to grapple with from growing competition in the EV space, the global chip shortage, problems with the global supply chain and the shift in investor preferences away from technology.
Investors remain cautious towards technology in 2023 and Musk’s Twitter distraction certainly doesn’t help.
Tesla shares fall further in after-hours trading as Musk mulls future at Twitter
Shares in Tesla, the electric car company that is responsible for making Elon Musk one of the richest men in the world, continue to suffer in after-hours trading.
The stock price is down a further 0.77%, adding to further pain for shareholders.
Tesla shares having plunged more than 62% so far this year – a fall that is partly linked to the continued controversies related to Musk’s forays into social media ownership.
A quick check in on European equity markets, where major indices are trading higher at the start of trading:
FTSE 100 is up 0.36%
FTSE 250 is up 0.2%
Germany’s Xetra Dax is up 0.68%
France’s Cac 40 is up 0.7%
Italy’s FTSE MIB is up 0.6%
Analyst: Twitter has been a “black eye” for Tesla
Dan Ives, a managing director of equity research at US investment firm Wedbush Securities, says Musk’s willingness to step back may be linked to the fact that controversies linked to Twitter have started to damage his “golden child”: Tesla.
Ives told BBC Radio 4’s Today programme this morning that while Musk has not necessarily followed through with the decisive calls of Twitter polls in the past, this time is different:
The last few weeks, few months, [have] been a black eye for Musk and a black eye for Tesla, and I think ultimately that’s the golden child: that 90% plus of his wealth.
And that’s why I think the writings on the wall, and I think ultimately in the next 24 hours, Musk will probably name a temporary CEO of Twitter.
Ives said it’s clear that Musk needs to stick to his strengths:
He can build rockets and create electric cars. That’s why he is who he is. But when it comes to social media and to Twitter, I think this is a diff type of animal, and he’s realised he can’t balance this as well as Tesla and Space X.
And I think the writing’s on the wall that he cannot be CEO of Twitter.
And as for how quickly we could see changes enacted, Ives reckons the executive overhaul could be triggered within hours.
I think the pressure was building, I think ultimately, probably in the next 5-6 hours, it’s going to be the end of Musk reigning as CEO of Twitter.
Full story: Musk sets up Twitter poll asking if he should step down as head
Elon Musk has asked Twitter users whether he should step down as the head of the company, promising to abide by the results of his poll.
Musk assumed the role of CEO at the end of October after firing a host of senior executives and dissolving its board of directors. Within minutes of posting the poll, more than 1 million people had voted.
After 20 minutes of polling, when the yes vote gained a double-digit lead, Musk responded to a suggestion that he had already picked a new CEO, saying: “No one wants the job who can actually keep Twitter alive. There is no successor.”
Introduction: Elon Musk pledges to honour poll over his potential resignation as Twitter CEO
Good morning, and welcome to our rolling coverage of the economy, business and the financial markets.
Less than two months after Elon Musk controversially bought Twitter for $44m and installed himself as CEO of the company, he is putting his fate in the hands of its users.
Following a string of controversies over layoffs, new posting policies and temporary journalist bans, the billionaire issued a Twitter poll in the early hours of Monday morning, asking users “Should I step down as head of Twitter? I will abide by the results of this poll”
As of the time of writing, the poll had already attracted more than 14 million votes, with around 57% voting for his resignation.
The poll is set to close around 11am GMT, though it is not clear how quickly Musk would step down if the majority of voters call for his ousting.
It is also unclear who would replace Musk as chief executive.
He said in a separate tweet, Musk said: “No one wants the job who can actually keep Twitter alive. There is no successor.”
Meanwhile, it’s relatively quiet on the economics front in the lead up to the Christmas weekend, with the CBI industrial trends survey for December due later this morning.