The British Army has shrunk to a force of only 72,000 soldiers, its smallest size in two centuries.
Cpl Aaron J. Stone/UK Ministry of Defence
The British Army is now smaller than those of Romania and Bangladesh.
Its size raises questions about the UK's ability to support NATO, confront Russia, or fight a war.
"Right now, the British Army cannot generate a single division, let alone two," an expert told BI.
What has happened to the redcoats that defeated Napoleon and helped win an empire that stretched across a quarter of the Earth's surface?
The British Army has shrunk to its lowest level since the early 1800s. Years of relentless budget cutbacks have left it with just 73,000 active-duty soldiers. That's a far cry from the Chinese army of 2 million soldiers, Russia's 1.3 million, or the 460,000 active-duty troops of the US Army.
Britain's Army is now smaller than those of Romania and Bangladesh, and just slightly larger than those of Canada and Armenia. Until now, its lowest manpower level over the last two centuries came in 1823, when it had just 72,000 soldiers. But that understates the current problem. Britain's population in 1823 was just over 20 million, versus around 67 million today. Adjusted for population, the British Army of 1823 would have around 225,000 soldiers today.
This raises questions about the ability of Britain to support NATO, confront Russia, or to engage in any major or long-term conflict. "As things stand, the British Army is a one-trick pony," Nicholas Drummond, a British defense expert and former infantry officer, told Business Insider. "It would deploy, fight for a maximum of six months, and then be fully depleted."
The British Army has never had it easy. For centuries, it was the poorer cousin of the Royal Navy, which was seen as the guardian of an island nation and its empire. The writer Rudyard Kipling pointed out in poems like "Tommy" that Britain doesn't support its army until there's a war:
For it's Tommy this, an' Tommy that, an' "Chuck him out, the brute!"
But it's "Savior of 'is country" when the guns begin to shoot;
Thus the British Army's muster rolls have fluctuated depending on the world situation, and the perpetual parsimony of His Majesty's Treasury. In 1812, when it fought Napoleon and burned down Washington, DC, it had 246,000 soldiers. In 1918, it ended the First World War with 3.8 million personnel, and 2.9 million in 1945.
In 1989, the British Army had 156,000 soldiers, or more than twice its present size. Like many armies after the end of the Cold War, it was downsized due to a perceived lack of need, difficulties in recruiting soldiers, and the belief that precision-guided weapons meant fewer boots on the ground.
However, the shocking casualties and trench warfare in the Ukraine conflict suggest that future wars will be attritional, with victory going to the nations that have the most stamina, industrial might and resources to sustain losses. Yet with just 28,000 Army reservists, Britain lacks manpower to flesh out undermanned units in wartime, or to replace losses. Even the Army's current two combat divisions aren't fully capable.
"Right now, the British Army cannot generate a single division, let alone two," Drummond said.
"It simply doesn't have the supporting units needed to sustain it when deployed."
"We have no second echelon force to provide a third, reserve division, casualty replacements, or to create the basis of a larger wartime Army."
Drummond argues that today, Britain needs two readily deployable mechanized divisions, one using tracked vehicles and a lighter unit on wheels, each of 25,000 troops. "In addition to this, we need training regiments and Army schools, and a regular reserve. Historically this has required 30,000 to 40,000 additional personnel. So the irreducible peacetime strength of the Army is 80,000 to 90,000 soldiers."
If money is the root of all evil, then the British armed forces have been sinned against for 35 years. In 1984, the UK's defense spending was 5.5% of GDP. It is currently a bit over 2 percent, with the newly elected Labor government of Prime Minister Keir Starmerpledging to honor the previous Conservative government's to raise the defense budget to 2.5%. This is less than America's 3.5% spent on defense, though it exceeds NATO's goal — which many members have yet to fulfill — of 2% of GDP allocated to the military.
It's not just the Army that is struggling. The British armed forces have been cut back to 183,000 personnel, and even then, they can't find enough recruits. A shortage of sailors has forced the Royal Navy to decommission warships, and the Royal Air Force can't attract enough pilots.
To be fair, the problem is caused by more than stingy government bean-counters. With many nations abolishing conscription, and civilian careers seen as more lucrative, this is not a good time to be a military recruiter anywhere. But as a nation past its imperial glory, Britain has prided itself on punching above its weight. A skeleton army won't help.
Michael Peck is a defense writer whose work has appeared in Forbes, Defense News, Foreign Policy magazine, and other publications. He holds an MA in political science from Rutgers Univ. Follow him on Twitter and LinkedIn.
Inheritances can cause friction between families. One sibling might inherit more or be resented after being named the executor of the estate. Even when assets are split equally, family members might butt heads over how money should be invested or spent.
Bari Tessler, who's been a financial therapist for 23 years, told Business Insider that inheritance can often bring up a lot of emotions, such as guilt, betrayal, and shame.
She shared advice she gives clients to help navigate their emotions and family conflicts.
1. Pause before spending anything
Tessler told BI that, while you might have the urge to spend an inheritance quickly, it's important to give yourself time to adjust to the change in circumstances. She suggested waiting between six months and a year before taking any big decisions on how to spend the money.
This period can help people work out any emotions it brings to the surface, she said. "You need some transition time to process and understand," she added.
2. Figure out your relationship to money
Even people with the same upbringing can have different approaches to handling their money and this can create conflict, Tessler said. "How you earn, save, spend, and invest will be different," she said.
Understanding your emotions around money can help to navigate tricky inheritance conversations, Tessler said. "Know your money story. Know where your challenges and triggers come from," she added.
People might feel that they don't understand money or that their siblings don't see them as financially responsible.
She said people are sometimes given a "financial identity" by others. She recalled how she was seen as the sibling who spent rather than saved, when she was younger. Tessler eventually realized she could be both a spender and a saver. She said that challenging a family's narrative of your relationship with money can help build your confidence.
3. Try to understand how their relationship with money might relate to yours
Tessler said it could be helpful to try and understand how your family members' relationship with money might interact with yours.
Using personality tools, such as the Enneagram, can help people figure out where their family members are coming from when disagreements arise, she added.
Tessler said she has previously advised clients to wait 24 hours before reading emails from "intense and challenging" family members. She has previously read such emails with clients to help them make sense of it.
"It's about learning how to have better money conversations with the people closest to you and how to negotiate better with challenging siblings," Tessler said.
Almost immediately after arriving, while driving into downtown Los Angeles from the airport, they were surprised at the sheer number and variety of fast-food chains along the highway.
In Australia, we have several major fast-food chains, but our sons, Charlie and Thomas, couldn't believe how many different chains there were in the US. They were surprised that there was a need for dozens of different burger chains, fried chicken restaurants, and fast food joints. We let them pick one to try, and they chose the iconic In-N-Out.
They couldn't understand why all the dollar bills looked the same
Every Australian bill is a different color, making it easy to distinguish. Charlie and Thomas were surprised that every American dollar bill looked the same. This concerned them, as they were worried they would accidentally hand over a 20-dollar bill instead of a one-dollar one and lose money. I solved this by only giving them one-dollar bills.
They also had a problem with tax being added at the cash register which they weren't used to.
Determined to maximize their spending, they were frustrated by the pricing system. In Australia, the price displayed is the final price (including tax and tip), so they found it challenging to determine what an item would cost. We explained they needed to add tax (and occasionally a tip), but the differing state taxes necessitated using a calculator each time, which diminished their shopping experience.
Being asked to repeat themselves annoyed them
I don't believe our Aussie accents are very strong, but many Americans found it difficult to understand Charlie and Thomas and were often asked to repeat themselves. A few people even asked if they were speaking English.
Both hate tomatoes, so when ordering, they always ask for "no tomatoes." However, they pronounce it as "to-mah-to" rather than how Americans pronounce it, often leading to confusion. Another word that caused an issue was water, which we pronounce "war-ta."
By the end of the trip, they had learned to say tomatoes and water in an American accent.
The fast food novelty eventually wore out, leading to a surprising conversation
As we traveled across several states, we endeavored to eat healthy food but found this a challenge among the spate of cheap (but generally fried) fast food options. Midway through our second week of vacation, Charlie, who loves his junk food and is known for avoiding vegetables, shocked me. While choosing where to eat, he turned to my wife and me and said, "Can we please go somewhere with vegetables and where the food isn't fried." I was stunned.
Another thing that stood out to them was the patriotism of Americans
During our visit, they remarked on the number of houses and businesses that proudly displayed the American flag — it is rare to see an Australian flag outside an official place back home. We also attended a few sporting games, and they didn't expect the anthem to be sung — in Australia, we sing the anthem only before major events. Both boys enjoyed the spirit and passion the crowd had when singing the song and the respect shown to veterans.
My in-laws live in Texas, and the boys loved spending time in their backyard shooting BB guns at targets. They loved it so much that they requested BB guns for Christmas. Unfortunately, they are illegal in Australia, so their request had to be denied.
Since that first trip, Charlie and Thomas have been back several times, so there isn't much that surprises them anymore. Now that they are 17, they have stopped asking for a BB gun — instead, they ask for 100-dollar bills to spend. I guess they are no longer worried about the sameness of the bills.
Russian jets like this one, a Russian Sukhoi Su-35S military fighter jet, have been key elements of the air war over Ukraine, which is teaching the West a thing or two about how to fight Russia for the skies.
Pavel Pavlov/Anadolu Agency via Getty Images
The alarm bells have been sounding throughout the war in Ukraine, warning loudly that if Kyiv falls, an emboldened Russia could set its sights on NATO next. In such a devastating fight, airpower and airspace control could be decisive.
The Russian air forces have underwhelmed over the past 2 ½ years of war, but they also have rapidly adapted and scored wins through tactics such as stand-off bombing and synchronized drone and missile barrages. Other elements of the aerospace forces have also effectively denied Ukraine the chance to shift the battlefield from the skies.
"It's been surprising they're adapting over time through trial and error," Justin Bronk, an airpower expert at the UK's Royal United Services Institute, said.
From what this war has shown, to counter the Russians, NATO needs more air defenses, new ways of countering drones, and new basing concepts. Without these, the alliance could face a nastier fight should the worst come.
That's according to interviews with a dozen air-warfare experts, including former fighter pilots and current and former Western military commanders and officers.
Experts told Business Insider the Ukraine war has underscored how some elements of modern air combat are radically changing. Advancing technologies have upended the operating environment in the skies, and extensive surface-to-air-missile networks are creating battlespaces almost impenetrable for older aircraft and still daunting for newer, more-advanced planes.
Russia's air force hasn't done as well as expected
The intense fighting in Ukraine has given the West a better picture of the Russian military's capabilities and revealed that many earlier assessments of its strength were overblown.
Some vaunted Russian weapons, such as S-400 air defenses, T-90M tanks, and "hypersonic" missiles deemed unstoppable, have not always lived up to the hype.
But Russia's problems have extended beyond its weapons. Russia botched the initial invasion by failing to establish air superiority from the start, and it has been unable to synchronize its air and ground forces.
Though the S-400, the air-defense system pictured, hasn't always lived up to its fearsome reputation, Russia has fielded a formidable air-defense network that has proven a serious challenge for the Ukrainains.
DIMITAR DILKOFF/AFP via Getty Images
While Russia has some fairly capable systems and weapons in Ukraine, "the employment is extremely poor," Bronk said, highlighting unforced errors like Russia shooting down its own aircraft despite rigid command structures that should prevent such mistakes.
On the battlefield, effective airpower should aid the advance of armored combat vehicles and infantry by striking an enemy's strongpoints, as well as the reinforcements and supplies they depend on. To do this, aircraft must fly overhead of ground forces — or nearby — to target enemy positions.
Andrew Curtis, an independent defense researcher, described Russia's support for its ground troops, especially in the early days of the war, as "little short of woeful."
"I think that surprised quite a lot of Western observers," he said.
Russia has demonstrated that it's unable to suppress or destroy enemy air defenses, fly effective counterair missions, or run complex composite air operations like those the US Air Force pulled off in the opening days of Desert Storm in 1991 and then in the Iraq invasion in 2003.
These failures have thwarted Russian efforts to overcome Ukraine's air defenses and enable significant breakthroughs on the ground, Mark Cancian, a retired Marine Corps colonel and a senior advisor at the Center for Strategic and International Studies, said.
The war in Ukraine has shown that Russia's air force isn't as capable as previously thought, but it has shown it can adapt and score wins. Su-34 fighter-bombers, like the one pictured here, have, for example, conducted devastating glide bomb attacks against Ukrainian front-line forces and cities.
aviation-images.com/Universal Images Group via Getty Images
"The Russian air force is a lot more vulnerable than we thought it would be," Guy Snodgrass, a former TOPGUN instructor and retired US naval aviator, said.
"What the Ukraine war has shown is that their capabilities were significantly overstated," he added, though he said it would be a "mistake" to dismiss the Russian threat.
Russian air forces have also scored some wins
Despite its inadequacies, Russia's airpower has scored some wins that shouldn't be understated, and it still holds some capabilities in reserve.
Russian bombers have pummeled Ukraine with long-range missiles fired from within its airspace, and fighter-bombers have bombarded Ukraine's defensive lines with guided glide bombs. The glide bombing has shattered defenses and contributed to Ukraine's battlefield losses and withdrawals in recent months.
Russia has developed bombs fitted with guidance kits that can be launched from beyond the reach of ground-based air defenses or air-to-air missiles.
It's now ramping up production of these devastating weapons, and it has yet to deploy some of its more-advanced air assets.
Guided glide bombs, like the one seen here beneath a Russian aircraft, have been a problem for Ukrainian defenders given the limited options available to defeat them.
Russian Defense Ministry Press Service photo via AP
Russia has also shown it can field a robust air-defense umbrella — similar to the one Ukraine has built with Western help — layered with powerful radars, electronic-warfare systems, and missiles.
Neither Russia nor Ukraine has managed to secure lasting air superiority because both sides can detect each other's aircraft and eliminate them with a large arsenal of surface-to-air missiles.
Ukraine has lost at least 135 fixed- and rotary-wing aircraft, while Russia has lost nearly double that figure, the open-source intelligence site Oryx reported in February. The destruction of so many fighter, bomber, and transport aircraft on both sides underscores the threat posed by air-defense systems.
Russia could challenge NATO's historical air dominance
Since the end of the Cold War, the US and its Western allies have enjoyed the clear advantages of having the superior air force — or the only air force — in conflicts they have fought around the world, from Europe to the Middle East. And in fights like Desert Storm and the Iraq War, the West established air superiority by taking out its opponent's air defenses.
Russia would be a very different opponent. It has the territory and industry to build and field massive and sophisticated air defenses that an opponent may struggle to destroy.
In wars like Afghanistan, the US dominated the skies, providing troops on the ground the necessary support for a different kind of warfare than what Ukraine is engaged in today.
AP Photo/Hoshang Hashimi, File
And "should the Russian military succeed in a limited land invasion, it would immediately establish surface-to-air missile (SAM) coverage over any captured territory," Can Kasapoğlu, a Hudson Institute nonresident senior fellow, said recently. "In this scenario, NATO airpower would need to fly intensive missions focused on the suppression and destruction of enemy air defenses."
Experts and Western military officers have said that in such a fight, the US and its allies, even with fleets of fifth-generation stealth fighter jets, likely would find it difficult to establish the same level of air dominance they've largely had since the end of World War II.
Giorgio Di Mizio, an air-warfare expert at the International Institute for Strategic Studies, said that a fight with Russia would likely be "quite different from all the scenarios that we have faced over the last decades, where there was no contestation of the air domain."
In future fights, it may be possible for the US to achieve air superiority only in bursts — small windows in a specific time, place, and location where air defenses are missing, destroyed, or out of ammo, Gen. David Allvin, the US Air Force chief of staff, said on the "War on the Rocks" podcast in January.
"It's not a given, and it's been a given for the last 30 years," Gen. James Hecker, the commander of NATO's air command, said earlier this year. He said NATO hadn't been serious about fighting Russia since the end of the Cold War, but the military alliance was taking steps to strengthen its air capabilities.
"If we can't get air superiority, we're going to be doing the fight that's going on in Russia and Ukraine right now," Hecker said. "And we know how many casualties that are coming out of that fight."
An initial Russian attack could surprise
Russia failed to execute a decisive shock-and-awe blow at the start of the war in Ukraine. That doesn't mean NATO can expect the same, but it would be a vastly tougher enterprise against 32 states, many of which are armed with advanced fighter jets and air-defense networks, than it was in Ukraine.
The Russian air force can't meet Western air forces air to air in a major attack without being "shot to pieces," Bronk said. But that's not all that Russia brings.
The Russians could attempt a surprising and impactful opening attack, experts said. For example, the Russians could target vulnerabilities like satellites to try to disrupt the space-based communications and navigation NATO airpower depends upon.
Russia has a number of capable jets, Su-35s like the ones seen firing missiles here, but overall, as a collection of dozens of nations, NATO has the superior air combat capabilities.
REUTERS/Maxim Shemetov
And if Russia made "a dash for the Baltic republics, for example, in the first few hours or days of the war, there would be a lot to do for Western air forces," Fabian Hinz, an IISS missile expert, said.
In this nightmare scenario, the Baltic states would need NATO airpower to stop a large Russian combat force from advancing, and the greatest threat to that endeavor likely would not be Russia's air force but other capabilities, such as its air defenses.
Russia could be expected to use any aerial sanctuary to attack the Baltic defenders and inbound NATO troops with the drone and glide-bomb attacks it has used in Ukraine, as well as to menace Western Europe with an even larger missile campaign than Ukraine has faced thus far.
Col. Riivo Valge, deputy commander of Estonia's air force, said "to decisively blunt this kind of theoretical attack, NATO should collectively invest into the air defenses of the whole Eastern flank."
Crowded airspaces
The proliferation of drones and varying precision-guided missiles has dramatically changed warfare, driving a greater need for extended interceptor-missile inventories.
"The focus on UAS — unmanned aerial systems — and cruise missiles has been much greater than any conflict we've seen previously," Mattias Eken, a missile-defense expert at the RAND Corp., said of the Ukraine war.
A dominant feature of the war in Ukraine has been unmanned aerial systems, from small quadcopter-style drones like this one to the larger systems seen in past conflicts. They're used for a range of actions, including surveillance, one-way attack, targeting, bombing, and more.
Paula Bronstein /Getty Images
The conflict in Ukraine has heavily stressed stockpiles of precision-guided munitions, but Russia has supplemented its arsenal with Iranian-made and homemade one-way attack drones, particularly for strikes on cities and critical infrastructure. And, like Ukraine, the Russians have employed loitering munitions and cheap exploding first-person-view drones.
These threats collectively require layers of air defenses, electronic-warfare options, and more to defeat. As air-defense batteries fire away at higher-end threats, troops on both sides of the conflict have taken to defending their trenches from the FPV drones with shotguns.
Experts told BI that the West needs more systems to counter such threats, including inexpensive options to down cheaper missiles and drones instead of using million-dollar interceptor missiles. One option could be the interceptor drones Ukraine is developing.
Future fights will strain air defenses
Ukraine's air-defense network is widely credited with stopping Russia from achieving greater gains and forcing it to fight a grinding ground war that has cost Russia absolutely staggering losses.
But the demand has been insatiable, and Valge, the Estonian air-force officer, said these defenses were the "most visible deficiency" in Western forces.
Others agreed. A former Western air force intelligence officer described Europe's current missile defense network as "kind of patchy with a few Patriots here and a few Patriots there." This person spoke on condition of anonymity as he was not authorized to speak about what he learned in the role.
Patriot batteries like this one have been extremely valuable for Ukraine, helping to shut down barrages of Ukraine's cities and critical infrastructure and shooting down enemy aircraft.
Anthony Sweeney/US Army
Cancian said that the West stopped investing significantly in air defenses after the Cold War and took its focus off the Russians, adding that it was considered a given it could achieve air dominance "in pretty much every environment that they were going to be operating in."
In Ukraine, the world has seen that Western air defenses can shoot down incoming drones and missiles when they have sufficient coverage and enough ammo, and the performance has quelled doubts about the Patriot.
Demand for Patriot missiles is up, as demonstrated by several European countries' requests to purchase them earlier this year and the new Western pledges to send Ukraine more Patriot batteries and components.
But the strain on air defenses is certain to be high in future fights. The ubiquity of drones and long-range missiles suggests that advancing armor columns will need to move forward with shields of electronic warfare and air defenses, assets that are even more important if these forces can't count on friendly aircraft overhead.
In the opening phase of Ukraine's highly anticipated summer 2023 counteroffensive, for instance, its advancing combat vehicles, among which were Western tanks and armored vehicles, were marred by Russian attack helicopters because of the lack of mobile air defenses that proved their worth elsewhere. And later, as Russia launched new assaults in the fall, Ukraine's defensive response was hamstrung by ammunition shortages for its air defenses.
When Ukraine launched its summer 2023 counteroffensive, it ran into numerous problems that hindered its assault, one of the big ones being Ka-52 helicopters like the one pictured here.
REUTERS
Lockheed Martin is ramping up its Patriot missile production, pushing for 550 annually, but in a fight with the Russians, more could be needed depending on how the West prioritizes its defense; each Patriot interceptor missile costs about $4 million.
There are other air-defense assets out there, but they face similar limits on manufacturing capacity and arsenal size as well.
"I don't think we are learning the whole entire lesson just yet," Timothy Wright, another missile expert at IISS, said.
Spreading out
Another lesson of the Ukraine war is that fixed bases are easy-to-find targets. Eken of the RAND Corp. said Ukraine managed to prevent its air force and air defenses from being destroyed in the first days of the invasion by spreading them out.
He described it as having units dispersed over a wide area but with a command-and-control system that could get them all to work together to defend or attack and urged the West to give the tactic additional consideration.
Russia didn't start noticeably embracing this tactic until Ukraine began scoring hits against its air bases with long-range attack drones. While the West practices disaggregation to a certain extent, such as through highway operations and austere basing, it still heavily focuses on permanent bases.
The planes pictured here would be just a sample of the full air combat power available to the NATO alliance, but much of it is concentrated at vulnerable bases.
REUTERS/Thilo Schmuelgen
Jarmo Lindberg, a former Finnish fighter pilot who previously served as the commander of the Finnish Defense Forces, said the idea of dispersal has been core for Finland as it formulates its military strategies with the threat of neighboring Russia in mind.
He said Russia's invasion showed all frontline NATO states should adopt it.
But the shift wouldn't be easy for all of NATO. An air base centralizes fuel and munitions storage, spare parts to repair planes, and the mechanics and air-traffic controllers who keep flight operations running. Dispersal increases the challenge of keeping all these airfields supplied and may spread its talent too thinly.
The former intelligence officer who spoke on the condition of anonymity said that it's "a cultural thing that most Western air forces are used to operating from centralized bases." But he advocated for a shift in how the West treats aircraft and command centers, saying that "lining them all up to get whacked is not really an option."
NATO's next move
A war where the much-larger and more-powerful NATO faces off against Russia would look different from Ukraine's fight. But experts said the West must invest in its militaries now. Russia may be deterred if the West appears strong enough.
Bronk said that "it's so much cheaper and easier" to invest now in the capabilities to deter Russia than it is "to actually invest in the forces capable of fighting an extended war for six months, a year, two years."
Specifically, NATO needs to boost its air-defense capabilities along the alliance's eastern flank, where member states have said they could be the first ones targeted by Russia should it succeed in Ukraine, and place a greater focus on force dispersal to make aircraft and their accompanying support assets less vulnerable to attacks.
Strengthening NATO's ability to deter a Russian attack has been a consistent effort for the 75-year-old alliance and was a focus of talks at the 2024 Washington, DC summit.
REUTERS/Evelyn Hockstein
Valge, the Estonian air-force officer, argued that "Russia understands strength." The stronger NATO's eastern flank is, he said, "the less room there will be for any fatal misunderstanding."
That's not to say NATO doesn't already have a highly capable fighting force, including sophisticated air-defense systems available across Europe and fifth-generation fighters like the F-22 and F-35, as well as other stealth assets such as the B-2 bomber and the B-21 that's set to eventually replace it. There are also a ton of combat-ready fourth-generation aircraft, including F-16s, F-15s, Mirages, Eurofighter Typhoons, and Gripens. And surface-to-surface missiles are making a comeback. But there are questions of whether it has the arsenal and manufacturing base for an extended war.
"Nobody really wants an air war with Russia," said John Baum, a Mitchell Institute expert and retired US Air Force lieutenant colonel. "It is not a highly desirable thing, I think, from either side, to want to have this air war." But the West can't afford not to be ready for it.
Investing legend Charlie Munger, Warren Buffett’s long-term business partner, is famous for his witty and wise quotes. He once said, “Show me the incentive, and I will show you the outcome.”
This quote emphasises the importance of aligning incentives with desired outcomes, highlighting how compensation structures can drive behaviour and decisions.
High pay for management can be a powerful motivational tool when wisely designed to link to business performance. However, it may be a yellow flag for shareholders when there’s a disconnect between compensation and business results.
With this in mind, let’s examine the S&P/ASX 200 Index (ASX: XJO) CEO compensation as reflected in the FY23 financial reports.
ASX 200 CEO pay table for FY23
Every July, the Australian Council of Superannuation Investors (ACSI) publishes an annual survey of CEO pay in Australia’s largest listed companies based on the previous financial year’s data.
Some of the interesting findings from ACSI’s 2024 report, released on Friday, include:
The median CEO total realised pay for ASX 100 companies fell from $3.93 million to $3.87 million, which is the lowest median in the 10 years.
In FY23, ASX 100 CEOs received a bonus at 66.3% of the maximum, while for the ASX 101-200 companies, the median bonus outcome was 60.7% of the maximum.
CEOs in companies listed on ASX but based in the US tend to have higher realised pay outcomes.
The highest termination payment in FY23 was $7.61 million for former CSL Ltd (ASX: CSL) CEO Paul Perreault.
Greg Goodman of Goodman Group remains the highest-paid domestic CEO with a realised pay of $27.34 million. Macquarie’s Shemara Wikramanayake was in second place, with a realised pay of $25.32 million.
Why should ASX share investors care about CEO pay?
In recent years, the topic of CEO compensation has increasingly come under scrutiny. We often hear about CEOs earning exorbitant salaries and bonuses, disconnected from the company’s performance or the shareholders return.
This misalignment between management pay and company outcomes is especially important for minority shareholders like us. It can create a disconnect between the interests of the executives and those of the stakeholders they are meant to serve. This misalignment can result in decisions that prioritise short-term gains over long-term sustainability, potentially jeopardising the company’s future.
The key is whether the incentive structure is objective and well-aligned with business performance.
One of the best ways to avoid these issues is to invest in companies with high insider ownership. For larger companies with widespread share ownership, it’s often beneficial to review the management remuneration section in the annual reports.
Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Amcor Plc wasn’t one of them.
The online investing service heâs run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*
And right now, Scott thinks there are 5 stocks that may be better buys…
Motley Fool contributor Kate Lee has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL, Goodman Group, Macquarie Group, ResMed, and Wesfarmers. The Motley Fool Australia has positions in and has recommended Amcor Plc, Macquarie Group, ResMed, and Wesfarmers. The Motley Fool Australia has recommended CSL, Goodman Group, and Sonic Healthcare. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
Meta on Friday announced its plans to roll back restrictions on former President Donald Trump's social media accounts ahead of the Republican National Convention.
Brandon Bell via Getty Images
Meta announced plans to remove its January 6-era restrictions from Donald Trump's accounts.
Trump had been banned and then reinstated on Meta's Facebook and Instagram as well as X and YouTube.
Though his old social media accounts are now unrestricted, Trump is sticking with Truth Social.
Donald Trump's social media accounts have returned to pre-Capitol riot status.
Meta on Friday announced plans to remove a heightened suspension penalty from the former president's accounts. The restriction, which increased the punishment for rule violations to include automatic re-suspension of his account, had been put in place when Meta first reinstated his account in January 2023 following a two-year suspension.
The social media giant had originally banned Trump's Facebook and Instagram accounts "following his praise for people engaged in violence at the Capitol on January 6."
"With the party conventions taking place shortly, including the Republican convention next week, the candidates for President of the United States will soon be formally nominated," read Meta's press release regarding its decision. "In assessing our responsibility to allow political expression, we believe that the American people should be able to hear from the nominees for President on the same basis."
The statement said that the penalties were considered "a response to extreme and extraordinary circumstances" and ultimately were never needed because Trump didn't continue to violate the platform's terms after reinstatement.
The reversal of restrictions on Trump's accounts comes just days after Trump threatened Meta CEO Mark Zuckerberg with prison time if he's elected again, escalating the pair's yearslong public feud.
When reached for comment by Business Insider, a spokesperson for Meta declined to answer specific questions regarding the timing and rationale behind the decision or whether any other restrictions remain on the former president's social media accounts.
Meta appears to be the final major social media platform to roll back the last of its January 6-era restrictions on Trump's accounts. Trump was originally banned from Meta's platforms, X (formerly Twitter), and Google-owned YouTube days after the Capitol riot.
After Elon Musk purchased Twitter, he reinstated Trump's account in November 2022. Meta reinstated his Facebook and Instagram accounts in January 2023 with the now-terminated restrictions — and YouTube gave Trump his channel back in March of the same year.
Though his old social media accounts are now unrestricted and boasting tens of millions of followers, Trump is still primarily sticking with his own company, Truth Social.
After being removed from mainstream sites, Trump founded an alternative social networking site and has used it as his primary platform since its launch in February 2022.
Truth Social went public in March, initially boosting Trump's net worth by billions, but the company has faced financial woes and an uncertain share price following SEC disclosures that revealed massive losses.
Representatives for the Trump campaign did not immediately respond to a request for comment from Business Insider.
ASX exchange-traded funds (ETFs) provide an easy way for Aussie investors to gain exposure to global shares without the hassle of having to trade on several different international exchanges.
There are hundreds of global shares ETFs to choose from on the ASX. Some track indexes like the MSCI World Index, the NASDAQ-100 Index (NASDAQ: NDX) and the CRSP US Total Market Index. Some are sector-based. But most ETFs have specific strategies designed by the providers, who seek to beat the market’s benchmark returns.
Some global shares did better than ASX shares in FY24.
In the United States, the Nasdaq Composite Index (NASDAQ: .IXIC) rose by 28.61%, the S&P 500 Index (SP: .INX) ascended by 22.7%, and the Dow Jones Industrial Average Index (DJX: .DJI) lifted by 13.69%. The MSCI World Index rose by 18.37%.
By comparison, the S&P/ASX 200 Index (ASX: XJO) rose by 7.83% (or 12.1% with dividends included).
Global shares ETFs give Aussie investors immediate diversification in terms of stocks and geography in a single trade. The disparities in the performances of ASX shares and US shares outlined above demonstrate how useful geographical diversification can be, with or without hedging to the Australian dollar.
So, which ASX global shares ETFs delivered the best total returns in FY24?
New figures just released by the ASX reveal the top performers of the year. Let’s take a look.
Top 6 ASX global shares ETFs for total returns
This article focuses on ETFs that invest in global shares. They include index-based and sector-based ETFs, as well as those operating under a specific strategy designed by their ETF provider.
We’ve included each ETF’s management expense ratio (MER), which is the fee you pay every year. Fees can vary widely between providers, so this is always useful research information.
According to the data, here are the top six global shares ETFs for FY24.
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By all accounts, ASX shares have had a pretty good year in 2024 so far. As it currently stands, the S&P/ASX 200 Index (ASX: XJO) has added around a healthy 4.35% this year to date, which doesn’t even include the extra boost that dividend returns would be providing. What’s more, the ASX 200 has, as of yesterday, just reached a new all-time record. And that is good news for our superannuation funds.
If your super is invested in the popular ‘balanced’ option, it’s likely that between 40-60% of your super wealth is invested in stocks. So recent record highs for both the US and ASX share markets bode well for our retirement savings.
But balanced funds are so named because they invest in a wide variety of different assets. These include shares, as we’ve just established. But they also include more defensive assets like cash term deposits and government bonds. This is done in order to mitigate the stock market volatility that many Australians hate to see in their super funds.
However, if you select what’s known as a growth fund, rather than a balanced fund, chances are your returns over 2024 have been even higher.
That’s because a growth fund doesn’t attempt to mitigate portfolio volatility like a balanced fund does. Instead, it goes all in on ‘growth‘ assets like ASX and international shares. These investments make up almost all of a growth super fund.
Balancing growth in your superannuation fund
Earlier this month, we looked at the average return for the typical balanced superannuation fund. These funds returned an average of 7.2% over the 12 months to 31 May. Over three years, the average return was 4.1% per annum. This went up to 5.1% per annum over five years and 5.3% over ten years.
According to this firm, the average growth superannuation fund (containing 61%-80% growth assets) in Australia returned 9.4% over the 12 months to 31 May.
Over the prior three years, these funds averaged 5.3% per annum, rising to 6.7% per annum over five years and 6.8% over ten years.
For a high-growth fund (81-95% growth assets), the returns were higher still. These funds managed to hit 11.5% over the 12 months to 31 May. Their three-year returns averaged 6.2% per annum, and the five-year returns, 8.1%. That rose to 8.3% per annum over ten years.
Chris Brycki, CEO of Stockspot, said that the average returns from super in FY2024 should be prompting all of us to check up on our own funds:
If your balanced or growth fund returned less than 10% this year [FY2024], it’s important to question your super fund about it. Are the fees too high? Are they paying fund managers for unsuccessful stock picks? Are they invested in illiquid unlisted assets that are facing devaluations?
The trend of indexed super funds outperforming active ones is likely to persist as scrutiny increases over the valuation processes of unlisted assets by regulators like APRA, and as trustees adopt more realistic valuations of these assets
So just by comparing the returns from growth and balanced funds, you can see the advantage of opting for a high-growth fund. That’s provided it fits your individual financial circumstances, of course.
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Elon Musk has previously said he would not donate to a 2024 presidential candidate.
Grzegorz Wajda/SOPA/Getty Images
Elon Musk donated an undisclosed amount of money to America PAC, sources told Bloomberg.
The billionaire previously said on X that he is not donating money to any candidates.
But Musk has been critical of President Joe Biden and has supported right-wing causes.
Elon Musk has donated an undisclosed amount of money to America PAC, a super political action committee working to elect Donald Trump in 2024, sources familiar with the donation told Bloomberg.
A Trump campaign spokesperson did not respond to a request for comment from Business Insider.
Musk has not publicly endorsed a candidate for the 2024 race.
The billionaire previously stated on X that he had no plans to donate to any US presidential candidate.
"Just to be super clear, I am not donating money to either candidate for US President," he wrote in March.
But as BI's Peter Kafka noted, Musk's statement made no indication if those plans will later change or if he was merely being technical by saying he won't directly fund a campaign.
Bloomberg reported that the donation was "a sizable amount."
A super PAC allows a group to raise an unlimited amount of money from corporations and other donors but the money cannot directly go to a political candidate.
Many readers are likely to aspire to being a millionaire one day.
While there are many ways to achieving this goal, one method that has created countless millionaires is investing in ASX shares.
But could you really get there by investing $10,000? Well, the answer is yet, depending on your investment time horizon.
Turning $10,000 into $1 million with ASX shares
The power of compounding and time are your two best friends when it comes to investing. When these two combine, good things happen.
Historically, the share market has generated an average annual return of 10% including dividends.
Were it to do the same again in the future, a single investment in $10,000 could grow into something significant in time if you’re patient enough.
For example, thanks to time and compounding, $10,000 would turn into over $40,000 in 15 years if you averaged a return of 10% per annum and reinvested your dividends.
But clearly, $40,000 is still a long way from that millionaire status we are aspiring to.
Well, unfortunately, without making any further contributions, you would have to sit very patiently to reach this level.
In fact, it would take just over 48 years in total to grow $10,000 into $1 million with ASX shares and a 10% per annum return.
If you’re 21, then this means that you could have a million-dollar portfolio around the time you reach retirement age. That certainly would be a nice nest egg to combine with your superannuation.
But what if you wanted to get there sooner? Let’s look at making extra contributions.
Making a million quicker
Getting to $1 million quicker will depend upon your available income.
If you are able to start with a $10,000 investment and then make $500 contributions each month, it would take approximately 28 years to get there.
Think you could manage $1,000 investments each month? Great, because that would knock off about six years and take just over 22 years to get to $1 million.
Finally, if you’re lucky enough to have $2,000 available to invest monthly, then you need a touch of 16 years to grow your portfolio to millionaire status.
Which ASX shares should you buy?
History has shown that a focus on high-quality companies with strong business models has delivered great results.
Companies like CSL Ltd (ASX: CSL), Goodman Group (ASX: GMG), and Xero Limited (ASX: XRO) could tick these boxes and may be worth further investigation.
But the main key to success is to find the plan that suits you (and your budget) and stick with it through the long term. You will no doubt be thanking yourself for doing so in the future as your wealth builds.
Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and CSL wasn’t one of them.
The online investing service heâs run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*
And right now, Scott thinks there are 5 stocks that may be better buys…
Motley Fool contributor James Mickleboro has positions in CSL and Xero. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL, Goodman Group, and Xero. The Motley Fool Australia has positions in and has recommended Xero. The Motley Fool Australia has recommended CSL and Goodman Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.