Big tech dominates the Top 1,000 rankings
Big tech dominates the Top 1,000 rankings of companies published by The Irish Times today, with Apple once again leading the way in turnover and profits, albeit with lower numbers in both cases. The iPhone maker recorded revenue of just under €200 billion in the year to September 24th, 2023, down 10 per cent on the previous 12 months. Apple’s Irish operations posted profits of just under €65 billion, down from €69.5 billion a year earlier.
The company’s huge profitability is thought to be one of the key factors behind the surge in Irish corporation tax revenues in recent years. Earlier this week, the EU’s top court sided with the European Commission in its bid to make Apple pay €13 billion in back taxes to the Republic, delivering a significant legal defeat to the Irish Government and the US tech giant.
In terms of turnover, Google reclaimed second spot, leapfrogging Microsoft, with turnover of €72.6 billion (up 12 per cent), and profits of almost €2 billion for the year to the end of June 2022. The search engine giant, however, saw its profits fall almost 30 per cent to just under €2 billion.
Stephen Garvey splashes the cash
Stephen Garvey has been splashing his cash on shares in his house construction company Glenveagh lately, stock market filings show.
Just this week, he bought 150,000 shares in the home builder which, at the current price of about €1.46 would have cost him a little less than €220,000.
That follows on from a purchase in April of 100,000, which at the time cost him €126,000, and a purchase of another 100,000 in October when the share price was trading at about 95 cent, which would have cost him €95,000 or so.
His last major purchase before that was 200,000 shares in May 2023, which cost him about €190,000.
All of which means that the 550,000 shares he purchased over the last two years, at a cost of some €630,000, are now worth nearly €800,000, which is a neat bit of business for the boss.
Overall, Garvey holds more than 10 million shares in the company (according to the company’s annual report), worth close to €15 million at the company’s current share price, which has risen from about 95 cent a share in October to the current price – a jump of nearly €5 million in value.
Meanwhile, he’s been getting shares awarded to him under the company’s various share bonus schemes – in March of this year he was given 987,220 shares under the company’s long-term incentive plan, and he got 1.1 million under the same scheme in March of the previous year – as well as shares under the annual incentive programme.
Overall, the annual report shows that he has 2.2 million in nil-cost share options available, potentially worth more than €3 million at the current price.
That’s on top of Garvey’s annual salary of €600,000 salary, topped up with benefits of €24,595, and pension contributions of €30,000, for a total package worth €654,595 (which, admittedly, was down slightly on the €714,801 the year before). His total remuneration in 2023, including bonuses, was worth €1.5 million, the company’s annual report states.
The company’s generosity isn’t enthusiastically endorsed by all shareholders, however. Ahead of the last annual general meeting, the influential proxy adviser ISS recommended that shareholders vote against the company’s remuneration report, arguing that it was light on the details of the performance metrics by which bonus shares would be granted. (The company, in its last annual report, notes that “full details of the targets including information on the extent of achievement against them will be included in next year’s report”.)
It clearly swayed some investors, but only a minority, with 12.2 per cent voting against the remuneration report at the agm, which was held in May.
In any case, it leaves Garvey with more than enough liquidity to keep buying shares as they rise in price.
Eli Lilly announces further $1bn investment
Pharma giant Eli Lilly has announced a further $1 billion (€910 million) investment at the new Alzheimer’s medicines plant it is building in Limerick. The expansion of a plant that is still under construction will add a further 150 jobs to the 300 announced when the initial $1 billion investment in Limerick was announced in 2022.
Tracker mortgage holders to gain
Many Irish tracker mortgage holders are set to see their annual mortgage repayments fall by close to €1,000 per year as a result of two separate interest rate cuts expected to be rolled out by the European Central Bank (ECB) in the coming days. The ECB is widely expected to announce an interest-rate cut of 0.25 percentage points on Thursday that will bring its refinancing rate to 4 per cent.
World of Work
Not ready to retire?
When James Gorman leaves Morgan Stanley this year he will join a growing number of departing top executives opting to put together a smorgasbord of director, consulting and mentoring roles, rather than take on another full-time position or retire entirely.
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Gorman, the bank’s former chief executive, will complete a transitional year as executive chair in December. He has already taken a spot on the Disney board, chairs the Columbia Business School board of overseers and will probably accept other positions.
Noel Quinn, who was replaced as chief executive of HSBC last week, is going down the same path and even used the corporate jargon for such arrangements when he announced his departure earlier this year. He said he would “pursue a portfolio career” because he wanted to “get a better balance between my personal and business life”.
The trend is even stronger among chief financial officers of big global companies, where turnover in the first half of 2024 was at a five-year high, according to Russell Reynolds, a leadership advisory firm. Nearly 55 per cent of the departing CFOs planned to seek board jobs or otherwise scale back, up 15 per cent year-on-year.
In Other News
Apple warned of 'aggressive competition'
Apple warned the Government of “aggressive competition” from other countries trying to lure multinationals away from Ireland during a high-level meeting this summer.
The tech giant flagged what was described in Government notes of the discussion as “a very real threat to Ireland”.
Apple raised concern about infrastructure issues in Cork, where its European headquarters is located, saying it is “hindering” growth plans and it also highlighted delays securing work visas for staff.
The meeting between Apple’s vice-president of European operations Cathy Kearney and Minister for Enterprise Peter Burke took place in June as the final outcome of the long-running Apple tax case saga was awaited.
Cormac McQuinn has the full story
Today’s most read
Inside Business podcast
On this week’s episode of Inside Business we’re looking at the Apple tax judgment from the European Court of Justice with Joe Brennan. It was decided on Tuesday that the tech giant had enjoyed illegal State aid and the ECJ determined that Ireland should collect some €13 billion in back tax.
Joe Brennan has covered this saga over the past decade and joined host Ciarán Hancock on the line to discuss the story. What is the background to the case? How is the money likely to be spent? Will this impact foreign direct investment here?
Also on this week’s episode, we hear from Claire Nash who opened Nash 19 restaurant in 1992, going on a rollercoaster ride along with the ups and downs of the Irish economy. In January she pulled down the shutters after a succession of blows dealt by the pandemic, soaring inflation and the cost-of-living crisis. She discusses her reasons for closing.
Highlights this week
One to Watch
US central bankers will likely start long-awaited interest rate cuts next week with a quarter-of-a-percentage-point reduction, as they seek to reduce the odds of a recession.
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