Letter: Merit from mergers

Merit from mergers

It must be very difficult for the directors of Glaxo Wellcome and SmithKline Beecham to decide on the merits or otherwise of their merger when they have such a strong financial interest in its going ahead (Business Outlook, 3 February). The advisers, who are reported to be likely to receive pounds 400m for their contribution to an agreed merger (I would be happy to do this myself for rather less), also have a considerable incentive, which in many other spheres would raise questions about the quality of their advice.

May I suggest to the directors that they could easily persuade the public of their objectivity by committing the profit from share options arising from the merger (rather than from their good stewardship of the company) to charity, or to the redundancy fund for those members of their staff whose departure will be the prime cause of the added value of the joint company? This would be analogous to the building society which makes it a requirement of new members that they similarly donate windfall bonuses. On a rather different scale, of course.

MICHAEL SHOESMITH

Lydbury North, Shropshire