05/12/19

HEDGE FUNDS: Boss Pays Himself £200m Despite Profit Dropping.

As published on theguardian.com, Wednesday December 4, 2019.

 

The billionaire hedge fund manager Sir Chris Hohn paid himself £200m last year, slightly more than his Children’s Investment (TCI) fund made in profit.

Hohn, the son of a Jamaican car mechanic who emigrated to Britain in the 1960s, collected $261m (£200m) in dividend payments in 2018 from the activist hedge fund he set up in 2003, according to filings at Companies House on Wednesday. Hohn is the sole shareholder.

The pay is less than the $274m he collected in 2017 and the $364m he paid himself in 2016 but still makes him one of the highest-paid people in the country. His pay equates to £548,000 a day and is 1,333 times that collected by the prime minister.

The highest pay record by Companies House in 2017 was the £265m Denise Coates paid herself from Bet365, the gambling company she founded and runs. Bet365 is expected to reveal how much Coates collected in 2018 in the coming days.

Hohn is one of the UK’s more generous philanthropists and gave away $232m (£177m) through his personal charity, the Children’s Investment Fund Foundation (CIFF), last year. The charity, which has funds of just over $5bn, directed $80m at tackling the climate crisis and gave $140m to various children’s charities and projects. Hohn, 53, was knighted in 2014 for his philanthropy.

“The original mission in setting up CIFF was to improve the lives of children in developing countries who live in poverty. This hasn’t changed. I want to solve problems, not make grants,” he has said of the charity.

This week Hohn announced plans to target directors of companies that fail to disclose their carbon emissions, in the latest sign that investors are putting more pressure on boardrooms to step up their disclosure on climate risks.

Hohn has written to companies including Airbus, Moody’s and Google’s parent, Alphabet, warning them to improve their pollution disclosures or his fund would vote against reappointing their directors.

“TCI believes that climate change-related risks, in particular a company’s greenhouse gas emissions, will have a material effect on a company’s long-term profitability, sustainability and investor returns,” TCI said in the letters published on its website. “These risks include regulation, taxation, competitive disadvantage, brand impairment, financing, physical asset impairment and litigation.” TCI said disclosure should include targets for emissions reduction.

Personally and through his charity, Hohn has donated £200,000 to Extinction Rebellion on ­account of the “urgent need” for people to wake up to the climate emergency. “I recently gave them £50,000 because humanity is aggressively destroying the world with climate change and there is an urgent need for us all to wake up to this fact,” Hohn said in October. His charity is thought to have pledged a further £150,000.

Hohn was ranked as the 125th-richest person in the UK with a £1.2bn personal fortune on this year’s Sunday Times rich list.

TCI, which manages more than $28bn of assets, made a $260m profit in the year to 28 February after tax – a decline from $287m a year earlier.

The fund’s two directors – Hohn and Angus Milne, the risk and compliance director – also received a combined $388,000 in salaries and other payments, with $256,000 going to the highest-paid director.

Luke Hildyard, who campaigns against excessive executive pay at the High Pay Centre, called for higher taxes on top earners such as Hohn.

He said: “You don’t have to want to upend the entire system or have anything against Sir Chris Hohn personally to feel uncomfortable with one individual raking in £200m in a country where ordinary workers are enduring the longest period of pay stagnation since the Napoleonic wars and record numbers are resorting to food banks to feed their families.

“There are a lot of fairly simple measures we could undertake to achieve a slightly better balance between those at the top and everybody else. For example: fairer taxes, both on the super rich individuals that form the client base for funds like TCI and on the multinational companies they invest in.”