Episode 60 Show Me the Money

Tehran. I will be back at 10.00. Now it is

time for Show Me The Money with This is Show Me The Money, your

weekly guide to who's making the cash, how they're doing it, and

what it means for the way we work. With us tonight:

From jet engines and light bulbs to credit cards and health care. Is

there anything GE doesn't do? We'll ask its man in the UK, Mark Elborne.

Alastair Lukies got us all doing our banking on our phones with his

company Monetise. And Allyson Stewart-Allan is the

queen of marketing at International Marketing Partners.

If you got a �1 million bonus, would you hand it back? The boss of

NatWest and the Royal Bank of Scotland, Stephen Hester, is facing

even more pressure tonight to give his massive bonus back. Government

ministers - who didn't block the bonus - said they'd like him to

return it. And tonight the Labour Party says

it will force a debate in the House of Commons and demand that he is

stripped of his bonus. Mark Elborne, are you paid a bonus? I will

receive a bonus at the discretion of the board if they believe I have

done more than I'm required to do the help the business grow and the

company improve going forward. than you are required to do?

Correct. Who defines whether you have or not? My boss. We are

currently going through an appraisal process where every

employee's performance is looked at against the goals that were set a

year ago. Ultimately, that process goes to our board in the US who

makes decisions for the top executives of the company. The key

phrase was "at the discretion of the board". That is a key phrase in

RBS as well because the Labour Party says that that is the clause

that determines his bonus as well? This is the entitlement to the

bonus at the discretion of the board, though not the amount of the

bonus. We don't have an entitlement to a bonus. It is at the discretion

of the board as to whether one should be paid and if so, how much

it should be. That is where we stand. Having that phrase just on

its own doesn't necessarily mean it's decided on a year-to-year

basis, it depends on the magic words that are around that phrase -

at the discretion of the board? discretion, if it is a contractual

entitlement, the discretion is only as to the amount. What triggers

your bonus? There are some triggers we have in a long-term plan for

senior executives around earnings per share, cash from operations,

one of them is about the size of the balance sheet. That is exactly

the same set of metrics that determine the entitlement of every

single person in the plan - it could be up to 4,000 people.

Everybody either wins or loses, benefit or doesn't benefit by the

performance of the company. So we are all in it together. When you

see the type of attack that Stephen Hester has been under from the

media over the last week, what do you think? Do you feel sorry for

him? I think he is in a very difficult position. He must have

realised he was taking on a very difficult job. I think that there's

the political side of this, which is obviously what is getting the

attention. He has a job to do, a contract that he signed. He clearly

has performance requirements from the board and it is a question of

whether he does or does not perform now. I think it is a difficult

debate. It is one that has become a bit too politicised but from a

businessman's perspective, it is a question of what his contract says,

what is his entitlement, has he performed, is the business

improving, has the balance sheet adjusted itself? Alastair Lukies,

do you think he deserves the money? This has become such a big issue

now, it feels like a witch-hunt than a discussion about bonuses. At

the end of the day, what we all want and Stephen Hester and the

Government would agree is a stable finance services industry. It is

something the UK has become famous for. As an entrepreneur, until we

have that sort of environment, we won't see more companies setting up,

raising capital, being able to borrow money and grow businesses

and we have all agreed over the last few years that that is where

the new jobs will come from. Allyson, Mark mentioned a culture

of entitlement. That is what the banks are accused of. They think

they are going to get that bonus at the end of every year irrespective

of what happens? Yes. What is very interesting about this topic, and

especially right now, is how contextual bonuses are. He might be

one of the only people for the job, Stephen Hester. He is not the only

person for the job. I think one of the things that is interesting is,

from a corporate diplomacy point of view, what do people think of the

brand of RBS when the Executive is potentially taking a bonus in a

climate that we are in, regardless of the contract? You think this

might damage the brand of the bank if he holds on to it? I believe it

would. I would be surprised if their market research isn't already

showing more distrust in that bank in particular than if he actually

takes the bonus. Does that have a material effect on the business?

customers don't trust the brand as much, of course it does. People

will leave. Alastair? Bank is also a problem in itself. Consumers look

to their bank for reliance when it comes to their current account,

when it comes to their credit card. A lot of the banking behaviour that

people have gone after is on the investment banking side. I think a

lot of people associate with their bank on the High Street as a retail

bank brand. That is a separate thing. Thank you very much.

Time for Boom or Bust, our quick flick through some of the news you

hoped you'd missed this week. OK - spot the mistake time. In my

school days it was spelt S-C-H-O-O- L. The sign outside this New York

school is trying to be too cool for school - spelt S-H-C-O-O-L. It was

in place for nearly two years before anyone noticed.

Windfall bonuses. They're not just for bankers. An unemployed man in

Greenland found a million Krona in his account, because of a bank

mistake. He gave the money away to the homeless. But now the courts

have ordered him to pay it back. He claimed he thought he'd won the

lottery. To Bolivia - for this yearly event.

The idea is you buy a miniature version of something you want. You

get it blessed. And the real thing turns up at some point over the

next year. Mini items on sale include mobile phones, cars,

university diplomas and even figures of domestic workers. I'd

quite like a mini crate of Blue Nun, please. Mark, the misspelling of

"school" on the road outside the school? I despair! LAUGHTER Is it a

metaphor for the state of education? I think it is the fact

that there are so many tools around that people can use that they don't

sit and learn spelling by wrote. My frustration is not just spelling,

but punctuation is even worse, maybe because I was once a lawyer,

I get a bit precise about this. I do despair at what I do see in some

documents and in newspapers, adverts and things like that. That

is a horror. We are fellow souls! The apostrophe counts! Have you

come across anyone who didn't get a job because they didn't use correct

punctuation? No. If you have a mobile phone, a laptop, an iPad,

it's automatically trying to help you correct stuff. People don't

bother. It is like abbreviated conversation on text. It becomes

normal language. What are you like with apostrophes? I'm still

learning British English! Is there a problem with levels of education

or attainment in the use of language? Or is it just us oldies

that say the kids speak somewhat differently? I think there is a

decline in written English. I have seen many CVs with typos and wrong

punctuation, semi-colons instead of colons. It does make you wonder if

a lot of the job is going to require writing to your clients or

customers, then you are going to think twice about it. Alastair, the

Greenland windfall, the court says he has to pay the money back. If

you had found a million Krona in your bank account, in your mobile

phone bank account, what would you have done with it? I would have

found out quite quickly because I have mobile banking! Thank you!

think that there was a part to that story that is a theme we are

feeling more in society today, the fact he gave the money away to the

homeless. What the financial crisis has proven is that people in a

crisis behave in their best way. Lots of people, more people are

giving money to these causes than ever before. He probably will have

to pay the money back. The fact he was inclined to give it away is

probably a good news story. What price honesty? Absolutely. If you

assume most people are honest, that is a safe assumption. Sometimes

businesses, you can tell from their cultures, they aren't really

assuming people are honest and you have to trust them. A quick thought

from each of you. If you were to buy the small gift of the thing you

wanted in the coming year, what would it be? It would have to be an

emerald. A small emerald. A small emerald. No limit on the size?

Small gift for the year? The Rugby World Cup. To give to Ireland?

course. Small gift you would like? I need a miniature ost path who can

fix my back when -- osteopath who can fix my back when it gets sore.

You sponsor the Olympics. Why do you do it? We started initially

because of our ownership of NBC that had the US network rights and

we began to see this was a channel for an event around the world. When

GE became a global sponsor in 2006, we realised if you want to promote

your brand and stand for certain values, like we do around our

healthcare business and energy, that event and the audience you get

to and the ability to create a legacy, there is no better event to

do it with. As we have progressed through our sponsorships, for

London, what we will leave behind apart from the technology and the

venues is the equipment we gave to the hospital, relighting Tower

Bridge. Part of the legacy, it has to be more than just an event. It

has to create a sustainable long- term path that will help broader

investment across this city. talk a lot about the economic

impact of the Olympics. People think that is merchandising. You

think it goes much deeper than that. It is not just the regeneration of

that part of London, it is the whole technological improvement

across business that happened when we got ready for the Games? Yes. I

think the fact that the bid was won based upon the desire and I think

we will see that the demonstration that this is the most sustainable

Games ever held, it shows an intent to experiment to find ways to power

the Games, the move people around, what we are doing around how we are

working with athletes and the horses, too, on areas of health,

it's a means of inspiring people to think a little bit more further

into the future and the beauty of the Games is it is an event, it has

a big one, it has a very large budget, and it gives all of those

who are participating, all the sponsors, a chance to showcase

something that they think is the way we are going to be in the next

decade or so. Does it give a short- term boost to the economy as well?

We need something like that. It is bound to give a short-term boost to

the economy. It has been a very welcome boost through a very

difficult three years. A very large investment has gone into all the

venues, �9 billion or �10 billion. What is also nice is the big

investment post-Games, they will turn the Olympic Village into

sustainable homes. There is a plan to develop a lot of the area around

the venues into a modern, vibrant area for people to live, shop and

work. People said the same thing about the Royal Wedding. It would

be great for tourism, then six months later, it depressed economic

activity? The Royal Wedding was a wonderful event on one day. Once it

had gone, it had gone. There's three weeks of the main Games,

there is a break, we have two weeks of the Paralympic Games and it's

been five years in the construction. And the important part is there

will be two more years of continuing construction afterwards

and then all of the benefits that will be provided by the investment

that's gone in. It will be a real What does Britain making the modern

world? You do a lot of high-tech things for today. We do a lot of

high-tech stuff, and we have 40 websites exporting them. So the

idea that British manufacturing is dead is a myth? Certainly in the

area we manufacture in. The manufacturing sector is pretty

vibrant. We had a piece of research, before the new year showing that 70

% of the hi-tech manufacturers we surveyed, about to London 50,

thought their businesses would grow more than 10 % in 2012, about 250.

The overall economy is clearly is struggling. The Eurozone, the

difficulty in demand, consumers struggling, that will be bad. I

think sentiment has had a big effect. We are beginning to see a

little softness through some of our manufacturing businesses. One of my

colleagues told me that there had been a little softening of demand.

I think there will be a poor first quarter compared to what we

expected in a difficult economy but I think Britain can manufacture

good stuff and we have good innovators and strong universities.

We have a government that has a strong commitment to high-tech

manufacturing and growing exports, so we are in a good position to

accelerate out of this by the end of the year. But what we talk about

rebalancing the economy, which is code for fewer bankers and more

ingenious and people making things, we are not talking about a return

to mass employment in manufacturing. It will still employ fewer people

than it once did. Look at the motor car industry. That was a business

that was consigned to history years ago but now we have a resurgent

motor car industry following an investment by one of the second or

third largest money factories in the country. Investment into our

manufacturing sector, if we can make people -- products that people

want, hence the export market, no reason why we should grow that.

these tough times Davos in Switzerland should be the place for

the European think tankers. Alastair, you went to Davos, so why

did you go? Certainly not to see Robert Peston in a hat. It is the

third time I have been. I get a lot out of it. You would have to do a

lot of air miles to see all those people in a business perspective

because you have thousands of world leaders there. We are also involved

in the World economic Forum. Money has a huge impact. Barely 2.2

billion bank accounts, so lots of people can benefit from our

technology. Sir it was a concentrated burst of people that

you wanted to do business with all have that face-to-face time to talk

about developing your business? would say that is 75 % of it but

there is also brand recognition. The UK, as you have been talking to

Mark about how some of the best inventors and engineers and

manufacturers in the world. We have not historically always done the

best job of telling people about it. I think the government are doing a

great job on one of the great things for me this year was that a

lot of people said the UK is a good place to do business and are you

still open for business, and the answer is yes. This is an important

signal for a small company. For a company of Alastair's size to send

someone there that means they think globally. Yeah, and you have to

planet in from the start. You have to build the Net works globally and

you cannot think you can grow the business domestically, but is

especially in the technology sector demand is global and the

applications are global so you have to make assumptions from the outset

that your brand can trouble effectively. That has to do with

language, culture and standing -- travel effectively. You need a

website with multiple languages. You have to negotiate across

cultures which is important. If you turn up at a big global event like

this and you are seen hobnobbing in people taking more seriously?

is the halo effect. You must be here because you are important,

because the other people here are, so maybe I should talk to you.

think that sums up the business. This year, finally, an official

event took place to show Britain selling itself and the global

market, something that India have been doing in Davos for years. We

have finally got in on the act. I think the UK is getting more

sophisticated in Laureen inward investment and promoting maybe a

bit more proactive lead the many fantastic things that this country

does. It makes great things. It offers fantastic services and I

think it has been a secret for a long time. Maybe they are just

cottony not to marketing in a bit more of a methodical way. -- cotton

in on. The event was in fact some sort of Tea Party. Is that really

the best thing we can see about ourselves? It seemed to go down

well there. Everyone else was doing big things and sometimes in Davos

it is the biggest or better thing. I thought it was quite English and

appropriately English. Next week there is talk of Facebook heading

down the direction of eight $100 billion float. The UK has to

produce the sort of organisations from the ground up, and one of the

key themes was do not think small, think big. There is a lot of tea in

the world. How would you like to own a business that means you don't

have to pay any tax whatsoever? At all. Here's tax exile wannabe,

Think of a tax haven and you probably think of something like

this, Monaco, where the wealthy take advantage of stunning scenery,

luxury lifestyles and those This might be a long way from the

Riviera but it has its own attractions, not just that you used

by - of the views of the River Wye. Back in 7096 an act of parliament

said that the bridge could not beat used for revenue, meaning the

owners cannot have stamp duty, income tax, capital gains, nothing.

Thank you. I love it. It's a fantastic place to live. When it

was put up for sale, this man thought it was too good a chance to

miss. We wanted to move to the seaside and take life a little

easier. So you did Enda by water after all. Yes, but not the route

we expected. We saw an article in the newspaper about the bridge

eight months ago and it has taken us that long to formally move in.

They paid about �400,000 and for that they got the Grade Two listed

bridge, a cottage, just over an acre of land, and most importantly,

It costs 80p to be able to cross the bridge is made times as you

want in one day which is expected to rake in up to �2,000 per week in

the busy summer tide, especially because it is considered bad to

avoid the toll. It takes about nine miles to drive to the nearest

bridge, cross for free and get back to the same point across the river.

What do you think about the toll bridge? If it is fantastic.

saves a good bit of mileage. It is good. Quite expensive though, ATP.

It doesn't sound much but if you go over regularly it is expensive.

everything was tax free, you would make a bigger profit than if it

wasn't. The fact you don't have to pay tax and there is no stamp duty,

So what are the costs of running the place? We have to have it

insured which is �12,000 per year and we pay maintenance which we

estimate that about �15,000 to keep the bridge in top order. By my

maths, even with the �27,000 going out every year, I reckon that would

give you about 40 p of the told straight into your pocket. It might

appear like that, but we do have additional costs of managing the

land and we have staff costs were it is busy. A what you have to do

to earn the money? Keep the bridge operating. It is partly automated

the we need someone on site if there is a power cut. And in the

summer months we have at somebody manning it all day long. The big

holidays for you them. I am afraid not. If you are kicking yourself

about missing out on the opportunity it is still worth

thinking about investing in infrastructure. Trust funds

focusing on tolls, airports and railway scampering in returns of up

to 6% which means a lot of banks saving rates. -- beats a lot of

rates. Next week, p YJ a bow, he doesn't like us mentioning the