Martin Vander Weyer’s Any Other Business
I’m baffled why anyone should be offended by the £275,000 salary paid to John Fingleton, the director of the Office of Fair Trading who was declared last week to be Britain’s highest-paid public servant. Even if Fingleton’s wad represents double the prime minister’s, it is barely more than one tenth of the bundle taken home by Adam Crozier in his final year as chief executive of the Royal Mail, which — despite Vince Cable’s declared intention to press ahead with part-privatisation — is still wholly in the state sector. The Teflon-coated Crozier, who came to the Royal Mail from the Football Association and has moved on to become chief executive of ITV, collected £633,000 in salary, a £1.5 million bonus for ‘meeting performance targets’, and another £225,000 in pension and other benefits. While he boosted profits, he could hardly claim to have satisfied Royal Mail customers, and will be remembered as the postman who said ‘every single letter is important’ while losing hundreds of thousands of them every week.
But just as outrageous (to use a word applied, for once quite reasonably, by the Communications Workers Union) is the fact that the three Royal Mail executives below Crozier collected an average of £1.4 million each. This has all been defended on grounds of needing to attract ‘the best management talent’ by Royal Mail chairman Donald Brydon, who used to be a sensible chap when I knew him in the City. But he and the rest of the top echelon of the corporate world, urged on by their bankers, have been captured by a self-reinforcing delusion that turns astronomical numbers into ‘the rate for the job’ — while the rest of us suspect that it would be entirely possible to find a team of competent logistics experts willing to run the Royal Mail for, ooh, let’s say £275,000 apiece.
Pru head should roll
Westminster byways close to The Spectator were seething with angry people on Monday, and they were not anti-war protestors or jobless Labour special advisers. They were Prudential shareholders, heading for their annual general meeting in the QEII conference centre and preparing to vent their rage on chief executive Tidjane Thiam and chairman Harvey McGrath for wasting £450 million of their money on the failed £24 billion bid for AIA, the Asian arm of American Insurance Group, which would have transformed the steady old Pru into a completely different business. Why haven’t either of the top men resigned, investors demand: the answer is because, like Sir Fred Goodwin at Royal Bank of Scotland in his disastrous ABN Amro deal, they had the full support of their board at every step. So the whole discredited line-up will cling on, hoping that decent trading figures this year (sales up 27 per cent for the first five months) will swiftly assuage investors’ discontent. Yet Thiam’s annual salary and bonus could still exceed £5 million, the sort of astronomical number the City defends by claiming it comes with no job security and in return for outstanding performance. If only to encourage others to see the folly of the top-pay system, Thiam’s head should roll. Would it really be tough to replace him, too, for less? Of course it wouldn’t.
A gift from Nadir
Asil Nadir, the Cypriot tycoon who fled Britain in 1993 to avoid trial for £34 million worth of fraud charges following the collapse of his Polly Peck empire, has instructed lawyers to see whether he might be granted bail if he came back to face justice. His return would certainly add colour to what promises to be a drab autumn. Polly Peck was a modest textile business until it was bought by Nadir, merged with his fruit-packing businesses in Cyprus, and turned into one of the hottest stocks of the 1980s boom. It came to own an exciting portfolio of brands from Russell Hobbs appliances to Del Monte canned fruit — but everything went pear-shaped in 1990 and the fraud squad came to call. When the assets of the group’s Berkeley Square head office were catalogued in the bankruptcy they included a fleet of BMWs for the use of what Christopher Fildes called here ‘14 ladies who seem to have been consultants’. That chimed with my own knowledge of Nadir’s modus operandi. When I worked in Hong Kong in the late 1980s, Nadir dropped in by private jet and hosted a lavish party. His PR man, an acquaintance of mine, fixed me an invitation, while confiding that he had been surprised to find his duties at stops en route from London included popping into town to find ladies — who, as it were, seem to have been consultants — to keep the tycoon amused. Each guest at the party was given a flashy gold pen, but I always felt embarrassed about having received a gift from the hand of Nadir. Some months later, I found myself spending an evening, as you do, in the station bar at Erlianhot on the Chinese-Mongolian border, where I had a long conversation with a barman called Liu who had been learning English via the BBC World Service. As a token of friendship before my train left for Ulan Bator, I gave him the gold pen. I hope it has outlasted Nadir’s exile.
My generation
A few years ago, I lamented the failure of my Oxford generation to make a success of their chosen careers in the financial world. About half of the 70 young men in the 1976 Gridiron Club photograph had gone into the City, I wrote, but only one (John Varley of Barclays) had reached the very top of the anthill. Well, I see another has come through at last: James Sassoon — who in those days had long, flowing locks to match his poetic surname, but is now respectably receding — is the new Treasury minister in the House of Lords, with the title of Commercial Secretary, after a career at UBS Warburg and a variety of Whitehall roles. When I wrote about the Grid group, incidentally, several people pointed out that I had overlooked another blazing hot-shot, despite the fact that he was sitting in the president’s seat in the front row: he was Johnny Cameron, who was head of ‘global banking and markets’ at RBS, and Fred Goodwin’s closest collaborator. But Cameron was last month banned by the FSA from ever working again in any full time or ‘significant influence’ position in banking or insurance. I hope for Lord Sassoon’s sake that the photo isn’t cursed.
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