One such case is the North Eastern brewing and pubs group Vaux now renamed Swallow which has come to symbolise the struggle between these

One such case is the North Eastern brewing and pubs group, Vaux (now renamed Swallow) which has come to symbolise the struggle between these two often opposing principles. Vaux has been in the Nicholson family for generations and the present chairman, Sir Paul Nicholson, is a stalwart of the local Sunderland establishment and business community. For the brewery that dominates the town to close would be a huge personal blow and embarrassment to Sir Paul. That's not just because their shareholders demand it of them; it is also because prevailing economic orthodoxy tells us that the determined pursuit of shareholder value is in the end the best route to the greatest possible economic benefit for all. Just occasionally, however, directors find themselves swinging the other way. Unsurprisingly, most big City investors are relaxed about that, even though they think more value still might have been realised had SmithKline not backed out of the merger with Glaxo Wellcome.. WHAT SHOULD have the higher priority - shareholder value or local employment and jobs? The answer, of course, depends on where you are coming from, but these days directors of publicly quoted companies are expected religiously to worship the former, whatever the short term human cost. The big number will anger many, but actually few City institutions will be among them.The reason why Mr Leschly is worth so much more this year than he was last, is not because his pay has risen, but because SmithKline Beecham's share price has soared in the intervening 12 months, thus enhancing the value of his shares and share options.

The figure is arrived at by taking Mr Leschly's annual salary - which went down because of a lower bonus - adding in his accrued pension benefits, the value of his share options, and finally the value of his beneficial holding of shares in the company. Mr Leschly hardly needs defending in this column against headlines like this, nor should he be. SmithKline Beecham is a British company, but Mr Leschly lives in America and he and his executives pay themselves American style remuneration packages. But it is a measure of how hysterical the debate over executive pay has become, that the rival newspaper claimed that even normally supportive City shareholders would be shocked and angered by this figure. Technically, the story was correct, though the headline gave a somewhat misleading impression. Jan Leschly, the former professional tennis player who runs SmithKline Beecham, has indeed extracted that kind of value out of his company over the years he has been there - rather more, actually But these were not his earnings last year. A RIVAL broadsheet newspaper known for its left leaning tendencies yesterday ran the following headline; "Record pounds 93m package for boss of drugs firm".

If we want a modern railway then Railtrack must have a regulatory settlement which gives it the incentive to invest. In any event, who else has the will, the capacity or the credit rating to do the job?If the regulator refuses to play ball, Mr Corbett can always produce his trump card - which is to threaten not to build the second half of the Channel Tunnel Rail Link But it probably won't come to that.. The old Rail Regulator wanted to beat up Railtrack, cut its cost of capital and salami slice the regulatory asset base on which it could earn a return.His successor, Tom Winsor, does not arrive until July But he already knows what Railtrack will say. Even that may prove a conservative estimate.Faced with the prospect of rail passengers getting grumpier and the road network getting still more congested, it looks hard not to share Railtrack's vision The question then arises of how to pay for the upgrades. Since privatisation, passenger journeys have grown by 25 per cent.

At the same time, however, network capacity has hit the buffers meaning that every new service introduced by the train operators merely results in an exponential increase in passenger delays.Everyone agrees that the capacity of the system needs expanding. Yet the extra pounds 10bn of investment Railtrack has identified will only enable it to stand still, supposing passenger traffic grows at its anticipated 30 per cent in the next decade. Much of the rest will depend on public sector partners stumping up taxpayers' money, or someone else coming along and employing Railtrack as a contractor.Nevertheless, these are still big sums and Railtrack's chief executive Gerald Corbett knows he has got the Government over the proverbial barrel. Of the pounds 27bn it plans to spend over the next 10 years, pounds 17bn was already in last year's plan.Of the pounds 10bn of "new money" a further pounds 1.8bn has been recycled from last year. All this for pounds 27bn, John Prescott and the new Rail Regulator willing. Railtrack's latest Network Management Statement, all 348 pages of it, dropped like a railway sleeper on the Deputy Prime Minister's desk yesterday inviting him to embrace its vision of a rail renaissance for Britain. The numbers look impressive but Railtrack isn't being quite as generous with its money, or rather its bankers' money, as its wish list of projects would have us believe.

WHAT WOULD you make of this Doctor Beeching? Tilting trains all the way to Newcastle, Waterloo to Heathrow direct, a new Midland Railway linking St Pancras to Glasgow and a new lease of life for some of those lines you so famously but cruelly axed in the 1960s. Some of the surplus will be used to finance investment and acquisitions in businesses such as asset management, but there will be scope for money to be returned in the form of a buy-back.Mr Bouton said the rival three-way bid by BNP would lead to a loss of revenue of 230m euros without achieving any cost savings from merging the retail branch networks.. This would be a result of extra savings the two banks have found since they began working on the merger plans over six weeks ago.They believe they can reduce the capital allocated to poorer performing businesses in their combined investment and corporate banking divisions by 26 per cent to 6.1bn euros by 2001, freeing up capital to use in better performing areas. However, he insisted there was no question of anything on the lines of the $500m (pounds 305m) package announced by Deutsche Bank for key Bankers Trust staff. "We will do the necessary," he said.Mr Levy-Lang and Daniel Bouton, the chairman of SG, were in London yesterday as part of their offensive to turn the tide in the battle with BNP, which gatecrashed their merger with a rival three-way bid. The bid is expected to receive formal approval from the French authorities to go ahead later today.The City will play a vital role in deciding the fate of the French banks, with 20 to 30 per cent of the shareholdings of all three banks believed to be UK-based.Mr Levy-Lang said: "The three-way merger between SG, Paribas and BNP will not happen.