Celtic 0 – 1 Hearts

As a Celtic fan married to a Jambo, I’m used to sole ownership of the football bragging rights in our house, bar the occasional blip.

The announcement that Heart of Midlothian FC intends to pay its employees a minimum of the Living Wage has rather spoiled that settled arrangement, however. I won’t ever be allowed to live it down.

I’m a shareholder in Celtic plc and will be attending the AGM to be held on 21st November. This year, as happened last time, the meeting will be voting on a resolution submitted by ordinary shareholders (a “Shareholder Requisition” in the arcane language of such things), worded as follows:

“This AGM instructs the PLC board to take all necessary steps to make Celtic Football Club a Living Wage employer by ensuring that all employees are paid a minimum rate of £7.45 per hour and to upgrade this annually in line with the Scottish Living Wage Campaign recommendations. Celtic FC would become the first football club in the UK to do so and will set an example to both sporting employers and the wider business community in the country.”.

The Celtic Trust, promoted as “an organisation established to represent the interests of small shareholders and supporters at Celtic”, is behind the resolution. It has also organised a petition of ordinary supporters to lend weight to the contention that the proposal has backing across the fanbase.

The Celtic Board does not support the resolution. Given the shareholding arithmetic, the votes cast by the Board at the AGM will make this a non-contest, as happened last year.

I voted for the resolution last time and will do so once again next month. The humiliating scunner is that the secondary aim of the resolution, to be the first club to take this step, can now never be delivered. To add insult to injury, the Hearts announcement included the rationale that it was “in keeping with the values we hold dear as a club“.  But . . . but . . . but that’s our line.  Ouch!

The Knave may have run off with the tarts; Anne Budge, the Queen of Hearts, has stolen Celtic’s thunder.

As regards the detail of the voting results at last year’s AGM, the Celtic Trust has posted on its own site the following analysis:

  • Number of votes cast – 1.2m for, 71.0m against, 0.6m withheld
  • Number of those voting – 1,164 for, 134 against, 40 withheld

The reason those two presentations look so different is simple: things are not decided on the basis of one-person-one-vote, but instead there is weighting according to the number of shares you hold.  The 134 voting against included the largest shareholdings, i.e. such as the investment institutions and – I assume – Dermot Desmond himself.

Ian Bankier, the Chairman, decided at the meeting last year not to read out his prepared statement, but instead addressed the audience in plain terms and attempted to respond directly to the points made from the floor. He even made what felt like full disclosure in telling us exactly what the cost impact would be if Celtic were to adopt the measure, namely £500,000 per annum.  I think he deserves some credit for doing that. Certainly, at the time I didn’t feel I was being fobbed off or patronised, albeit that I didn’t agree with the conclusion being reached.

Mr Bankier said something else. He suggested that the full impact might be double the nominal cost because of knock-on effects regarding the company’s wage structure overall. Again, that sounded reasonable enough to me.  I left the meeting with the impression, therefore, that the full cost would be about £1 million.

Later, some enterprising folk decided to do their own back-of-a-fag-packet calculations, just to make sure that we weren’t being misled. I’ll produce my own version here:

  • The National Minimum Wage has increased recently to £6.50 per hour, from £6.31.
  • The Living Wage is currently set at £7.65 per hour for outside London.[1] It is due to be increased early in November. Let’s guess that the new figure will be £7.85.
  • On that basis the difference in hourly rate will be £1.35 from November onwards (which isn’t much different from the £1.34 that applied before October this year).
  • Given the figure of about 120 staff affected, working on average about 20 hours per week for 40 weeks, this gives a total impact in the region of £130,000 for the year.
  • We should factor in the normal employer’s overheads of National Insurance and pension contributions, the fact that the NMW is lower for younger staff, allowance in case our assumption about hours is out and a further margin for the position being a bit more complicated than as set out here. (Must be conservative, after all.)
  • Even with all of those considerations, we would still get a figure that can’t be more than half of the £500,000 quoted.

Now, perhaps I wasn’t paying attention properly. It might just be that when Ian Bankier talked about “doubling” the figure, he was saying that he had taken account of that before releasing anything publicly, i.e. that the £500,000 would be the full impact after allowing for the effect on wage differentials.  Whilst it still seems a touch high to me, certainly that would be in the right ball-park.  I must listen to the explanation more closely this year.

Never mind all that, though. The resolution last year found favour with the overwhelming majority of those present.  There was a clear sentiment that it was the right thing to do and that the club demonstrably could afford it.  Some present called for it to be funded as required by a supplement to the season ticket price, with one man offering to stump up his contribution on the spot.  (Even at the higher figure of £1 million, the effect can’t be more than £25 per year.)

Chaps, this isn’t going away. The feelings this year will be running even higher on account of being put to shame by Hearts.

Let me repeat: last year most Celtic shareholders voted for the resolution.  You can be sure that the same will happen this year.  And next year if we have to . . . and so on until we win this.

 

 

Footnote

1. The £7.45 quoted in the resolution is a mistake, being the figure for the year before.

One thought on “Celtic 0 – 1 Hearts

Leave a Reply to Haivering Cancel reply

Your e-mail address will not be published. Required fields are marked *