Good morning. 
 
This is the video diary of Remuneration Associates; a specialist firm in London that focuses on supporting companies through the challenges of executive pay, either by taking decisions at remuneration committee level, or with executive groups trying to sort out incentive compensation. We work from London but we have clients around the world.
 
I'm talking today just after Easter April 2023. I was in church on Easter Sunday, a little church in Dorset in England, a beautiful Church; St John the Evangelist in East Holme in the middle of the countryside. It was empty apart from a small congregation of people largely over the age of 80, certainly nobody here under the age of 50. That's frightening from the stand point of the future of the church in this country, and that's not what this is about. It's really about what does that mean for other institutions, and let's take for example capitalism, that's largely how things are resources are allocated in our economy and our society. 
 
To what extent does the impact of younger participant have on the success or lack of it, of that institution? In the UK the average age of investors actually has fallen, in 2020 was 40 years old and 2022 to 35 years old. What's interesting about that is that clearly there's an influx of younger people into investment markets. In the United States 45% of Americans invest, by which I mean stocks, mutual funds, bonds, cryptocurrencies. And of those, 26% started early 2-years ago, 2020. 
 
Those people are 3 times more likely to be servicing their portfolio via a mobile platform, a phone, twice as likely to get their ideas from social media and twice as likely to own cryptocurrencies. They are younger and they are different. 26% of 18 to 34 year olds are looking at their portfolio every week so they're very focused on what happening now.
 
Warren Buffett, who I would imagine many of you will have heard of, of Berkshire Hathaway and with a reputation for investing, said "i you aren't willing to own a stock for 10-years don't even think about owning it for 10-minutes". So there's a bit of a challenge there young people coming in there and expecting things to happen much more rapidly. So what impact does that have on potential success or otherwise of capitalism, as it were, maybe we should think about what it is that makes capitalism work and and and whether it's going to be affected by that. 
 
What happens is that people invest in a company, they take a decision, based on all sorts of information, but essentially they have an expected return. The expected return on that is based on their opportunity cost; what would they get if they would have put that money somewhere else, and if the investment is going to achieve more than their opportunity cost, then they are effectively getting more than the expected return, to the extent they get a better return than expected they will be encouraged to invest more stock price will rise, a virtuous circle as it were will occur, and that draws in investment to things that are very important, pre-clinical companies trying to invest in drugs, companies that are trying to commercialise new ideas, companies trying to achieve industrial scale for products and ideas that had previously been in the laboratory. That's a very healthy system and what's interesting is that it seems to me that capitalism broadly has the benefit of having a attracted younger people far more successfully than the Church of England as I say. What does it mean that the audience will become bored more easily because they're looking at their investments far more regularly? does it mean they won't really understand what success is, because there're moving from one investment to another far more rapidly?
 
Possibly, but in the end I suspect that the degree to which a company over achieved against investors expectations, is going to be and will always remain, the bar that one has to jump over if you're an executive, which means that executive pay which essentially is the judgement of a company for achieving that hardle, will remain fairly robust as a measure of success. 
 
I think that one can view the system that we have as, in need of some repair, but a lot healthier than other institutions that one could name.
 
 Happy Easter.