It'll take great productivity to pay M&S boss

In the week when the property supplement of The Irish Times had as many pages as the newspaper itself, I arrived home to discover that our road had taken on the complexion of the building site behind the IFSC.

The street was littered with skips - including the one outside my house which was full of the old kitchen, the clapped out video and other sundry past-their-sell-by date products.

This sudden appearance of skips doesn't indicate that the homeowners of Clontarf are indulging in a spot of home improvement because they've changed their views on the property market - two houses came up for sale on the road recently (although that's quite unusual, only about half a dozen properties have changed hands since I moved here) - but it does indicate a willingness to launch into the terrain of builders tramping around the house all over again.

In my case, I now have the phone numbers of gas-fitters, electricians, tilers and the like filed carefully in my notebook. It is, I think, far more important to know a reliable tradesperson than have the home number of a capital-markets dealer in your possession.

Whenever we have conversations about what you would like to be if not a boring participant in the global hurly-burly that is financial markets, I generally plump for an electrician or a plumber.

Possibly a plumber, since when the kitchen is under six inches of flood water, a plumber is more than worth his (and regretfully the world of plumbing seems to be as male dominated as the world of almost anything else) weight in transferable securities.

I am, however, still waiting for an introduction to a plasterer who will do some reconstructive work on the kitchen walls, which still bear the marks of my and the man's joint efforts at removing the original tiles.

Nevertheless, we have progressed enough for the kitchen to be designated a usable area once again and my interest in home improvement has been relegated to the back burner - at least in the medium term.

There are a number of other little jobs around the home that I wouldn't mind getting done, but you can only take so much all at once.

Another part of our lives which has returned to normal is the ability to watch TV. One month after it was returned as unusable, we have been provided with a replacement TV by Dixons.

Why it couldn't have done this in the first place is beyond me. The only trouble is that every time it flickers we hold our breaths to see if it'll decide that enough is enough and switch itself off, or whether it can gather itself and keep on going. Mind you, I know how it feels.

The Bank of England managed to flicker into enough life to cut the base rate by 25 basis points last week. Rather surprisingly, surveys of market participants had swung against the prospect of a cut.

It wasn't that they didn't think a cut was necessary, they just weren't sure it would happen. However, it did and rates in Britain, at 5 per cent, are now at their lowest level over 20 years.

Industrialists have been pleading with the bank to cut rates for quite some time on the basis that it was necessary to boost British business and to get the pound lower.

Rather unfortunately, however, the economy already seems to be improving and now attention has been turned to the likelihood of rates having to go up again.

In the meantime, although sterling weakened off somewhat, the idea of a growing economy and the possibility of a reversal (however far into the future) of the rate cut has meant that there are still buyers of the pound out there.

In another improving economy scenario, strong Japanese GDP numbers have seen the yen ratchet up in value too.

Since the Japanese economy has been a basket-case for the past few years a few good numbers are to be welcomed, even though the prophets of doom are already circling and talking about higher rates there too.

But a lot of the growth was courtesy of the public spending programmes which the government embarked on precisely with the aim of hauling the economy up by the bootstraps. Sometimes you get the feeling that markets damn you when things are going badly and damn you even more when you try to put things right.

As regular readers will know, I take the plight of Marks & Spencer very seriously in this column. I'm sure it was reeling (as is the entire British retail sector) to hear that Wal-Mart, the US discount store and world's largest retailer, has bid $10.8 million (€10.36 million) for Asda, upping a rival bid by Kingfisher by 18 per cent.

The cat is now firmly among the pigeons in the British retail sector as WalMart is not exactly known for its compassion towards its competitors. Tesco and Sainsbury are probably having a few emergency meetings this week and I'm sure M&S is too.

It was prior to this announcement, though, that I read that Sir Richard Greenbury, who is now non-executive chairman of M&S, is to receive £450,000 sterling (€695,000) a year for a three-day working week. What! I'm all for rampant capitalism and paying people what they're worth but £450,000 for three days a week?

Mr Greenbury was at the helm when M&S recorded a 54 per cent drop in profits. Now M&S has cut back on its much-lauded graduate trainee programme as well as axing about 700 management jobs.

I suppose someone somewhere has also given the productivity pep-talk to the people who are left. It'll require a lot of increased productivity on the shopfloor to pay Mr Greenbury his £37,500 per month.

And I'll bet - like at most annual general meetings - if the shareholders object they'll be reminded of all the experience Mr Greenbury has of the retail business and they'll be told he represents good value for money. Of course he does.

It's hard to know what gives us good value for money these days, to be honest. However, I did get a leaflet from one of Clontarf's hopeful candidates in the recent local elections which showed potential.

The promises included affordable housing for all, greater environmental protection and an end to traffic chaos. Now, if someone could actually deliver on all those promises don't you think he or she would be worth £450,000 a year?

Sheila O'Flanagan is a fixed-income specialist at NCB Stockbrokers