Global daily news 18.07.2014

***FirstGroup vows 'deep review' of pay after investor revolt

John McFarlane bows to pressure after more than 25pc of shareholders reject remuneration report

Earlier this month activist shareholder Sandell Asset Management published a letter criticising FirstGroup management and saying the company had "significantly underperformed"

FirstGroup chairman John McFarlane yesterday pledged a “deep review” of the company’s executive pay policies in the wake of criticism of the near-£2m package received by chief executive Tim O’Toole last year.
Although he said he believed Mr O’Toole’s performance justified his latest package, he also stressed that the terms of the chief executive’s contract had been set at the time of his recruitment when there had been other companies looking to attract him.
“We are honouring decisions made in the past but my personal view is that what Tim achieved in the last 12 months was worthy of what he received,” McFarlane told the company’s AGM in Aberdeen.
Three separate pay advisory bodies had said FirstGroup's remuneration report should be rejected and questions were also raised by a number of shareholders at yesterday’s meeting. More than 25pc of shareholder votes were against the latest remuneration report, although the figure was down on last year’s total of around 30pc.
McFarlane promised shareholders the company’s pay policies would be “fully reconsidered” under a reconstituted remuneration committee led by former Sainsbury’s HR director Imelda Walsh and that major investors would be fully consulted.
But he also stressed FirstGroup ambitions to return to the FTSE100 and said the company needed to attract and retain the calibre of management team to get there.
Speaking to The Telegraph after the meeting Mr O’Toole pointed out that his basic salary had been frozen for the last three years and he had also waived his bonus previously.
He said he decided to take his latest £600,000 bonus after the company achieved positive shareholder returns during the year but said it was “unfortunate” that long term incentive schemes vested at the same time which made the increase in his total package - which almost doubled - look “questionable”.
“I appreciate people will raise questions and I don’t have a problem with that but the package is what I was hired at and I have not received anything beyond that.”
Responding to questions raised by the International Transport Workers’ Federation over pay levels for staff at the company, McFarlane also said as a general point he believed executive pay across the world had escalated to levels that “probably need to be thoroughly reviewed”.
Earlier this month activist shareholder Sandell Asset Management published a letter criticising FirstGroup management and saying the company had "significantly underperformed".
The charges from Sandell, which holds 3.1pc of the FTSE 250 company's shares, were similar to those levelled by the US activist in December last year.
Sandell has criticised O'Toole for being the highest paid chief executive among his transport peers despite FirstGroup's shares underperforming those of its rivals.
After yesterday’s meeting FirstGroup said shareholders had “overwhelmingly backed the composition and structure of the board and our plans to take the business forward".
“Across the group we are confident that we have the right programmes underway to build on our market-leading positions and improve performance to create sustainable value."
Last Thursday FirstGroup issued a trading statement in which it said its transformation programme was "progressing well".
It said it had succeeded in pushing up prices at First Student, its struggling yellow school bus business in the US, by an average of 4pc as it looks to improve profit margins. FirstGroup has a fleet of 49,000 yellow school buses and is the biggest provider of student transportation in North America but the company warned in January over margins at the division.
FirstGroup said in the update that it expects the proportion of low margin contracts at First Student to fall below 30pc in 2014-15 from 36pc last year. However it warned that operating profit at the division in the first half of its current financial year would be below the same period a year earlier due to the different timing of the Easter holidays.
Like-for-like passenger revenue at FirstGroup's recovering UK bus operation has increased by 2.7pc in the first quarter while the company said its UK rail division delivered a "robust" performance, growing passenger revenue by 6.6pc.




FROM THE MORNING STAR



Jul
2014
Thursday 17th
posted by Rory MacKinnon in Britain
US TRADE unionists trekked all the way to Aberdeen to confront transnational transport privateer FirstGroup at its AGM yesterday.
The firm faced a minority shareholder rebellion as its board asked investors to sign off on a £1.9 million pay package for head honcho Tim O’Toole — a staggering 86 per cent pay rise.
The deal represents an £800,000 raise in the space of a year, with an annual bonus of £600,000.
The jaw-dropping largesse was enough to warrant a personal visit from the International Transport Workers’ Federation and the US Amalgamated Transit Union (ATU), whose terminal worker members at subsidiary Greyhound are paid less than £6.40 an hour.
ATU international vice-president Bruce Hamilton, who attended the meeting, told the Morning Star that the company “did not respond with the commitment that we were seeking” — a raise to at least £8.75 an hour.
“If they think this is going to go away, they are wrong. Terminal workers deserve justice, and they are going to fight until they have it,” he said.
In Scotland, Unite union engineers working on Glasgow’s buses are balloting for strike action during the Commonwealth Games in response to a “derisory” below-inflation pay offer.
Meanwhile train drivers’ union Aslef general secretary Mick Whelan said the pay gap was further proof of the need to renationalise Britain’s railways — “where every penny and every pound can be spent on investing in our infrastructure rather than disappearing into private pockets.
“FirstGroup, like many firms, and this isn’t confined to the railway industry, say they can’t afford to pay their staff — the men and women who help create their company’s wealth — any more, while giving a few people at the very top quite extraordinary pay increases.
“No wonder people are concerned,” he said.
A FirstGroup spokesman declined to comment on Greyhound workers’ pay but said Mr O’Toole’s raise represented the end of a three-year freeze on basic pay for the company’s executive directors.
“For a company of this scale it is important to ensure that we attract and retain the highest-quality management motivated to deliver outstanding performance,” he said.
FROM SEAFARER TIMES:
***Thailand 'on trial' over food industry exposé victimisation
Submitted by Helmsman on Thu, 07/17/2014 - 21:12
Thailand 'on trial' over food industry exposé victimisation
17 July 2014 ITF Press Release received via email
The International Transport Workers’ Federation (ITF) has described Thailand as being ‘on trial’ for allowing a company to prosecute a human rights defender who exposed modern day slavery in its canned fruit and fishing industry. The ITF is demanding that charges against Andy Hall, a UK citizen who is due to stand trial in September on charges of criminal defamation, be dropped.
The criminal and civil cases were brought against Andy Hall by Thailand’s Natural Fruit Company following his research into the company’s operations for the report Cheap Has a High Price, published by the Finnwatch NGO (www.finnwatch.org). That report exposed smuggling of migrant workers along with the use of child labour, forced overtime and violence against workers.
ITF acting general secretary Steve Cotton stated: “Andy Hall’s investigations into the fruit and fish industries in Thailand helped expose shocking abuses there to a worldwide audience. He should be praised, not prosecuted. Thailand’s attorney general must act now to disallow this case, which is an example of blatant victimisation of someone for no greater crime than telling an unacceptable truth.”
He continued: “This legal case attempts to shoot the messenger and leave the true offender untouched. Thailand must address the unforgiveable abuses being allowed to take place on its lands and waters, and also ensure the right to freedom of opinion.”
ITF president Paddy Crumlin added: “Thailand itself is on trial. Its failure to act has rightly led to it being downgraded by the US government over human trafficking. If ever a country needed to allow defenders of human rights to identify problems, it’s this one. This impending trial is a national and international embarrassment and should be called off immediately.”
The ITF believes that Thailand should:
· Ratify and implement ILO conventions 87 and 98, respecting workers’ fundamental rights to freedom of association and collective bargaining
· Ratify and implement ILO Work in Fishing Convention No. 188
· Ensure that all companies operating in Thailand and benefiting from Thai resources and employment markets work constructively with trade unions and workers’ organisations
Andy Hall is detailing the case against him at the website http://andyjhall.wordpress.com, through which he can be contacted.
FROM USI:
17 July 2014
A FirstGroup bus in Glasgow
A FirstGroup bus in Glasgow
Greyhound Workers: Profits, Executive Compensation Come Before Customers and Employees
Aberdeen, Scotland –Profits and executive compensation come before customers and workers for FirstGroup and its CEO Tim O’Toole, Amalgamated Transit Union (ATU) International Vice President Bruce Hamilton will tell shareholders at the First Group Annual General Meeting at 11:00 today, 16 July 2014.
“It is shameful that as FirstGroup celebrates Greyhound’s one hundred year anniversary, it pays terminal workers wages that buy less than they would have in 1914,” said Hamilton, a former Greyhound bus operator. “We have baggage handlers, ticket agents, custodians and others earning wages so low that they qualify for government assistance.”
“The £2 million elephant in the room, of course, is Tim O’Toole doubling his own pay,” Hamilton continued. “This absurd compensation is not just insulting to American and Canadian workers. O’Toole and his colleagues rewarded themselves tens of thousands of pounds in payouts at the same time that they hiked fares on riders here in the UK.”
The ATU is campaigning to raise the wages and improve the working conditions of terminal workers at Greyhound facilities across the United States and Canada. Greyhound is a North American subsidiary of FirstGroup; three thousand of its employees are represented by ATU Local 1700.
The union’s campaign is not limited to the shareholders meeting. On 11 July, Local 1700 members in Cincinnati, Ohio, rallied outside of FirstGroup’s U.S. Headquarters and at the local Greyhound terminal. Actions have also been held in Los Angeles, California, Atlanta, Georgia, and several other U.S. cities.
Local 1700 has linked FirstGroup’s underpayment of its majority African-American workforce to Greyhound’s ugly history of racial segregation, noting that “Discrimination has many forms, and one is income disparity.” ATU also shared a caricature of O’Toole as a “£2 million elephant” crushing a Greyhound bus.
“There is a growing movement in the United States to raise the minimum wage to $15 per hour. This is a terrific opportunity for FirstGroup and Tim O’Toole to extend an olive branch to the people that keep their company moving,” said Hamilton. “And at the end of the day, Greyhound cannot afford to be on the wrong side of history again.”
FirstGroup purchased Canadian and U.S. Greyhound properties in 2007. The company has repeatedly refused to negotiate a national contract for U.S. terminal workers and has refused to offer any wage increases to other workers represented by the union. Most have been without a pay raise for more than two years.
Hamilton noted that union contracts have been thrown out, wages drastically reduced and pension and other benefits eliminated. “ATU wants to return to the bargaining table, but the company refuses to set any dates,” he said. “If they think this is going to go away, they are wrong. Terminal workers deserve justice, and they are going to fight until they have it.”
Also attending the event will be Mac Urata, secretary of the inland transport sections of the ITF (International Transport Workers’ Federation), which is supporting the ATU’s campaign. He explained: “FirstGroup is a transport giant, with responsibilities to match, yet its management is utterly failing to live up to them. US employees of the company should have the same rights as their counterparts in the UK. Today’s AGM offers an opportunity to expose the complacency and selfishness running riot at the top of the company, and the ATU and its colleagues in the international union movement are using it to hold the company to account.”
About ATU
The Amalgamated Transit Union is the largest labor organization representing transit workers in the United States and Canada. Founded in 1892, the ATU today is comprised of over 190,000 members in 253 local unions spread across 47 states and nine provinces, including 3,000 workers at Greyhound Lines, Inc. Composed of bus drivers, light rail operators, maintenance and clerical personnel and other transit and municipal employees, the ATU works to promote transit issues and fights for the interests of its hard-working members.