RUTH SUNDERLAND: New Year brings new bosses

Indefinable charisma factor: Tufan Erginbilgic

Anyone who doubts the impact a new leader can have on a company need look no further than Rolls-Royce.

Tufan Erginbilgic took over as chief executive at the aero-engine maker on New Year’s Day 2023. In the 12 months that followed, he has convinced the City he could succeed where his predecessors failed, and make Rolls great again.

He has talked to my colleague Francesca Washtell about his strategy in an exclusive interview in the Mail on Sunday tomorrow.

Rolls’ shares have tripled in value in 2023. Whether that performance is sustained in the long run remains to be seen.

But no one can deny that Turbo Tufan has got off to a phenomenal start.

At M&S, another great British name, Stuart Machin and Archie Norman, the chief executive and chairman respectively, appear to have instigated a genuine improvement, after two decades of false dawns.

To credit these individuals exclusively may be unfair on predecessors who put in a great deal of hard work, some of which may only have borne fruit after their departure.

But there is an indefinable charisma factor with the best bosses, which inspires others to believe in their vision. This can make them very hard acts to follow. Antonio Simoes, a former banking executive at HSBC and Santander, takes over on New Year’s Day at Legal & General from Sir Nigel Wilson, who has become virtually synonymous with the insurer.

Wilson’s philosophy of ‘inclusive capitalism’ has been compelling, and Simoes has pledged to continue it.

He faces some strategic challenges. L&G is a big player in pension risk transfers –basically, taking on defined benefit retirement obligations from UK employers.

The company pulled off a £4.8billion deal with the Boots pension scheme in November, the biggest so far of its kind.

But sooner or later, that lucrative stream will dry up. The shares, which performed well over Wilson’s reign, have flagged in the past couple of years, and Simoes needs to find a new wellspring of growth.

NatWest and BP lost their chief executives last year in unfortunate circumstances and have caretaker bosses.

Permanent appointments in post-scandal scenarios tend to be driven by the desire to avoid a repeat. That may or may not be the best route to growth.

The most consequential change of leadership – as and when it happens – will be at JP Morgan. Jamie Dimon, 67, has presided for the past 18 years over the Wall Street bank and its gargantuan balance sheet, currently just under $4trillion (£3.1trillion).

The board in 2021 granted him performance-linked incentives worth an estimated $50m (£39.2m) to stay another five years.

Despite some ill health, he seems in no hurry to step aside.

In a difficult year for most banks, the shares are up by more than 25pc in 2023.

Repeating the playbook from the financial crisis, when it rescued distressed operators, JP Morgan snapped up First Republic in the Silicon Valley Bank meltdown.

The bank so far appears to shrug aside scandal. A $290m (£227m) settlement with the victims of Jeffrey Epstein did nothing to stop the juggernaut.

Even the mightiest CEOs can stumble and fall, but we could all do with some of what Dimon’s been having.

House proud

Florid fears – or, in some quarters, hopes – of a housing market collapse in 2023 have failed to materialise.

Latest figures from Nationwide show prices are down 1.8 per cent in 2023. That, considering the backdrop of rising rates and a cost of living crisis, is pretty resilient.

The idea of a repeat of the late 1980s and early 1990s housing market catastrophe at this point looks remote.

The 100 per cent-plus mortgages on offer back in the day have been replaced by affordability checks and demands for chunky deposits.

A high percentage own their home outright, which underpins the market. Nationwide notes that the number of cash transactions is above pre-pandemic levels.

None of this, however, has done much to make property more affordable.

A first-time buyer on an average income, with a 20 per cent deposit, would have to hand over nearly 40 per cent of take-home pay in monthly mortgage payments. Ouch!

That’s assuming they can cobble together a down-payment, typically more than a year’s gross income. The coming year will be another busy one for the Bank of Mum and Dad – for those with access.

This post first appeared on Dailymail.co.uk