With their jobs on the line already, demanding that Prudential directors put their homes at risk too might seem a little harsh, but their failure to raise the millions it would take to subscribe to their own rights issue raises two important questions. If they can't find the money in these straitened times, why do they think other shareholders should?
More importantly, what happened to the principle that awarding directors with large numbers of shares would align their interests with investors? It's the best argument yet for dispensing with the fantasy world of the City's bonus culture and treating directors like the ordinary mortals they are.
I remain one of the few commentators to find the Prudential's strategic objectives compelling, but its execution of the transaction does not bode well for its chances of running the combined business successfully. For a deal that has been beset with presentational disasters from day one, the unusual sight of a rights issue that will not necessarily be fully taken up even by its own directors could prove the final nail in the coffin.
