Today's business and finance round up 20th August 2021

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20th August 2021

Good morning This week Netflix demonstrated the perils of oversharing with your staff. The streaming giant proudly advertises its unconventionally transparent workplace culture, which includes sharing financial results with about 700 employees before they're made public.This week the US financial watchdog sued three former Netflix engineers over insider trading, alleging they made more than $3m by trading on results before they were released.

Today's stories

• Lloyds Bank and John Lewis pivot

• FTSE boss pay down

Yesterday's market moves

FTSE 100 -1.5%  7,059 FTSE 250 -1.0% 23,607

Markets slid as investors worried about the withdrawal of US Federal Reserve economic support and China’s regulatory crackdown. Ongoing unsupportive headlines on the spread of the Delta variant of coronavirus also didn’t help.

FINANCELloyds Bank and John Lewis pivot

What’s going on?Yesterday two of Britain’s biggest corporates announced ambitious plans to pivot from their core operations.John Lewis Partnership, owner of the department store and supermarket Waitrose, is branching into savings and investment services.Lloyds Bank is planning to become one of the country’s largest private landlord in the next decade.

Why is this important?

Being a retailer in the age of declining high street is not a great place to be. That’s why John Lewis is teaming up with digital wealth manager, Nutmeg, to offer stocks and shares ISAs and general investment accounts.It’s leveraging its position as one of the most trusted brands in the UK to move into an area where trust is crucial.John Lewis already has credit services through its Partnership Card and also sells home, car and pet insurance.As more shopping moves online and away from physical stores, the company has set the goal of generating 40% of its profits from non-retail.In an era of record low interest rates, it can be tough making a profit as a lender. That’s why Lloyds, the UK’s biggest mortgage provider, is buying 50,000 homes in the next 10 years to turn into rentals. Based on current property prices and rental estimates, this would create a portfolio worth £4bn, generating profits of around £300m, according to the Financial Times.

TakeawayThe changing conditions in the high street and banking industries has led two of the biggest names in British business to adapt. John Lewis and Lloyds are using their strong brands and deep pockets to find extra sources of income by entering new markets.

PAYFTSE boss pay down

Earnings for the CEOs of the biggest listed UK companies fell 17% in 2020. But don’t feel too bad for them. Bosses at FTSE 100 firms took home a median pay of £2.7m, according to the latest report from think tank, the High Pay Centre. It’s the lowest amount since 2009.The research showed that CEOs were paid 86 times the average full-time worker in the UK.Pascal Soriot of drugs giant AstraZeneca was the highest-earning CEO, making £15.5m last year. Next came Brian Cassin of credit reference agency Experian who made £10.3m.However both packages look miniscule in comparison the £421m for Bet 365 boss Denise Coates who earlier this year took home Britain's biggest ever salary. But is not included on the list as the gambling firm is private and therefore not a member of the FTSE 100.The report also found that across 9 companies that used public money through the furlough scheme to pay their employees, average CEO pay over the period was £2.4m.The High Pay Centre says that CEO pay reflects a wider gap between rich and poor in the UK. The inequalities exposed by the pandemic and the volume of public money used to protect large businesses could strengthen the argument for measures to contain top pay and re-balance extreme income differences.

Stat of the day

Nando’s is the biggest collector of contemporary South African art in the world. The chain has over 9,000 pieces displayed in its restaurants.

Other stories to keep you in the loop

• Morrisons accepts improved offer from US private equity firm

• Bingo is back as Mecca owner Rank outperforms Covid lockdown predictions

• Chip shortage drives Toyota to cut global production by 40%

• Facebook unveils new virtual reality workspace

• Amazon reportedly set to open department store

• Gov intervenes in takeover bid of UK defence firm Ultra Electronics

• Trading app Robinhood warns of slowdown

• Are your work messages as private as you think?

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